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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



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|x | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended June 30, 2007



| ̈ | 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



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AVALON HOLDINGS CORPORATION

(Exact name of registrant as specified in its charter)



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Ohio                                                           |  | 34-1863889                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer 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 ̈

Indicate by a check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated
filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one):

Large
accelerated filer ̈Accelerated filer ̈Non-accelerated filer  x

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

The registrant had 3,190,786 shares of its Class A Common Stock
and 612,545 shares of its Class B Common Stock outstanding as of August 9, 2007.



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##### Table of Contents

AVALON HOLDINGS CORPORATION AND SUBSIDIARIES

INDEX



|                              |  |                                                                                                                       |  |     
|----------------------------- |  | --------------------------------------------------------------------------------------------------------------------- |  | ----
|                              |  |                                                                                                                       |  | Page
|PART I. FINANCIAL INFORMATION |  |                                                                                                                      
|                              |  |                                                                                                                      
|Item 1.                       |  | Financial Statements                                                                                                  |  |     
|                              |  |                                                                                                                      
|                              |  | Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2007 and 2006 (Unaudited) |  | 3   
|                              |  |                                                                                                                      
|                              |  | Condensed Consolidated Balance Sheets at June 30, 2007 (Unaudited) and December 31, 2006                              |  | 4   
|                              |  |                                                                                                                      
|                              |  | Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2007 and 2006 (Unaudited)           |  | 5   
|                              |  |                                                                                                                      
|                              |  | Notes to Condensed Consolidated Financial Statements (Unaudited)                                                      |  | 6   
|                              |  |                                                                                                                      
|Item 2.                       |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                 |  | 10  
|                              |  |                                                                                                                      
|Item 3.                       |  | Quantitative and Qualitative Disclosures about Market Risk                                                            |  | 16  
|                              |  |                                                                                                                      
|Item 4.                       |  | Controls and Procedures                                                                                               |  | 16  
|                              | 
|PART II. OTHER INFORMATION    |  |                                                                                                                      
|                              |  |                                                                                                                      
|Item 1.                       |  | Legal Proceedings                                                                                                     |  | 17  
|                              |  |                                                                                                                      
|Item 2.                       |  | Changes in Securities and Use of Proceeds                                                                             |  | 17  
|                              |  |                                                                                                                      
|Item 3.                       |  | Defaults upon Senior Securities                                                                                       |  | 17  
|                              |  |                                                                                                                      
|Item 4.                       |  | Submission of Matters to a Vote of Security Holders                                                                   |  | 17  
|                              |  |                                                                                                                      
|Item 5.                       |  | Other Information                                                                                                     |  | 17  
|                              |  |                                                                                                                      
|Item 6.                       |  | Exhibits and Reports on Form 8-K                                                                                      |  | 17  
|                              | 
|SIGNATURE                     |  | 18                                                                                                                   



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##### Table of Contents

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)



|                                                        |  |                             |        |   |                           |   |       |      |  |   |        |   |  |   |        |  
|------------------------------------------------------- |  | --------------------------- | ------ | - | ------------------------- | - | ----- | ---- |  | - | ------ | - |  | - | ------ | -
|                                                        |  | Three Months Ended June 30, |        |   | Six Months Ended June 30, |  
|                                                        |  | 2007                        |        |   | 2006                      |   |       | 2007 |  |   | 2006   |  
|Net operating revenues                                  |  | $                           | 11,534 |   |                           | $ | 9,230 |      |  | $ | 22,844 |   |  | $ | 18,154 |  
|Costs and expenses:                                     |  |                             |        |   |                           |   |       |      |  |   |        |   |  |   |        |  
|Costs of operations                                     |  |                             | 9,695  |   |                           |   | 7,798 |      |  |   | 19,167 |   |  |   | 15,338 |  
|Selling, general and administrative expenses            |  |                             | 1,677  |   |                           |   | 1,529 |      |  |   | 3,368  |   |  |   | 3,076  |  
|                                                        |  |                             |        |   |                           |   |       |      |  |   |        |   |  |   |        |  
|Operating income (loss) from continuing operations      |  |                             | 162    |   |                           |   | (97   | )    |  |   | 309    |   |  |   | (260   | )
|Other income (expense):                                 |  |                             |        |   |                           |   |       |      |  |   |        |   |  |   |        |  
|Interest expense                                        |  |                             | (4     | ) |                           |   | (3    | )    |  |   | (9     | ) |  |   | (7     | )
|Interest income                                         |  |                             | 133    |   |                           |   | 141   |      |  |   | 285    |   |  |   | 264    |  
|Other income (expense), net                             |  |                             | (38    | ) |                           |   | 69    |      |  |   | 20     |   |  |   | 122    |  
|                                                        |  |                             |        |   |                           |   |       |      |  |   |        |   |  |   |        |  
|Income from continuing operations before income taxes   |  |                             | 253    |   |                           |   | 110   |      |  |   | 605    |   |  |   | 119    |  
|Provision for income taxes                              |  |                             | 3      |   |                           |   |      |      |  |   | 3      |   |  |   |       |  
|                                                        |  |                             |        |   |                           |   |       |      |  |   |        |   |  |   |        |  
|Income from continuing operations                       |  |                             | 250    |   |                           |   | 110   |      |  |   | 602    |   |  |   | 119    |  
|Discontinued operations:                                |  |                             |        |   |                           |   |       |      |  |   |        |   |  |   |        |  
|Income from discontinued operations before income taxes |  |                             | 113    |   |                           |   | 371   |      |  |   | 113    |   |  |   | 364    |  
|Provision (benefit) for income taxes                    |  |                             |       |   |                           |   |      |      |  |   |       |   |  |   |       |  
|                                                        |  |                             |        |   |                           |   |       |      |  |   |        |   |  |   |        |  
|Income from discontinued operations                     |  |                             | 113    |   |                           |   | 371   |      |  |   | 113    |   |  |   | 364    |  
|                                                        |  |                             |        |   |                           |   |       |      |  |   |        |   |  |   |        |  
|Net income                                              |  | $                           | 363    |   |                           | $ | 481   |      |  | $ | 715    |   |  | $ | 483    |  
|                                                        |  |                             |        |   |                           |   |       |      |  |   |        |   |  |   |        |  
|Net income per share from continuing operations         |  | $                           | .07    |   |                           | $ | .03   |      |  | $ | .16    |   |  | $ | .03    |  
|                                                        |  |                             |        |   |                           |   |       |      |  |   |        |   |  |   |        |  
|Net income per share from discontinued operations       |  | $                           | .03    |   |                           | $ | .10   |      |  | $ | .03    |   |  | $ | .10    |  
|                                                        |  |                             |        |   |                           |   |       |      |  |   |        |   |  |   |        |  
|Net income per share (Note 2)                           |  | $                           | .10    |   |                           | $ | .13   |      |  | $ | .19    |   |  | $ | .13    |  
|                                                        |  |                             |        |   |                           |   |       |      |  |   |        |   |  |   |        |  
|Weighted average shares outstanding (Note 2)            |  |                             | 3,803  |   |                           |   | 3,803 |      |  |   | 3,803  |   |  |   | 3,803  |  
|                                                        |  |                             |        |   |                           |   |       |      |  |   |        |   |  |   |        |  

See accompanying notes to condensed consolidated financial statements.



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AVALON HOLDINGS CORPORATION AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(in thousands, except per share amounts)



|                                                                                                                      |  |               |         |   |                  |   |         |  
|--------------------------------------------------------------------------------------------------------------------- |  | ------------- | ------- | - | ---------------- | - | ------- | -
|                                                                                                                      |  | June 30, 2007 |         |   | December 31,2006 |  
|                                                                                                                      |  | (Unaudited)   |         |   |                  |  
|Assets:                                                                                                               |  |               |         |   |                  |   |         |  
|Current Assets:                                                                                                       |  |               |         |   |                  |   |         |  
|Cash and cash equivalents                                                                                             |  | $             | 9,487   |   |                  | $ | 13,251  |  
|Accounts receivable, net                                                                                              |  |               | 8,034   |   |                  |   | 7,672   |  
|Prepaid expenses                                                                                                      |  |               | 327     |   |                  |   | 223     |  
|Other current assets                                                                                                  |  |               | 387     |   |                  |   | 224     |  
|                                                                                                                      |  |               |         |   |                  |   |         |  
|Total current assets                                                                                                  |  |               | 18,235  |   |                  |   | 21,370  |  
|                                                                                                                      |  |              
|Property and equipment, less accumulated depreciation and amortization of $6,229 in 2007 and $5,854 in 2006           |  |               | 23,893  |   |                  |   | 18,696  |  
|Leased property under capital leases, less accumulated depreciation and amortization of $866 in 2007 and $698 in 2006 |  |               | 5,725   |   |                  |   | 5,816   |  
|Other assets, net                                                                                                     |  |               | 61      |   |                  |   | 69      |  
|                                                                                                                      |  |               |         |   |                  |   |         |  
|Total assets                                                                                                          |  | $             | 47,914  |   |                  | $ | 45,951  |  
|                                                                                                                      |  |               |         |   |                  |   |         |  
|Liabilities and Shareholders Equity                                                                                  |  |               |         |   |                  |   |         |  
|Current Liabilities:                                                                                                  |  |               |         |   |                  |   |         |  
|Current portion of obligations under capital leases                                                                   |  | $             | 1       |   |                  | $ | 40      |  
|Accounts payable                                                                                                      |  |               | 5,777   |   |                  |   | 4,723   |  
|Accrued payroll and other compensation                                                                                |  |               | 681     |   |                  |   | 561     |  
|Accrued income taxes                                                                                                  |  |               | 19      |   |                  |   | 24      |  
|Other accrued taxes                                                                                                   |  |               | 235     |   |                  |   | 252     |  
|Other liabilities and accrued expenses                                                                                |  |               | 2,276   |   |                  |   | 2,056   |  
|                                                                                                                      |  |               |         |   |                  |   |         |  
|Total current liabilities                                                                                             |  |               | 8,989   |   |                  |   | 7,656   |  
|                                                                                                                      |  |              
|Obligations under capital leases                                                                                      |  |               | 232     |   |                  |   | 317     |  
|                                                                                                                      |  |              
|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                                                                                                   |  |               | (19,441 | ) |                  |   | (20,156 | )
|                                                                                                                      |  |               |         |   |                  |   |         |  
|Total shareholders equity                                                                                            |  |               | 38,693  |   |                  |   | 37,978  |  
|                                                                                                                      |  |               |         |   |                  |   |         |  
|Total liabilities and shareholders equity                                                                            |  | $             | 47,914  |   |                  | $ | 45,951  |  
|                                                                                                                      |  |               |         |   |                  |   |         |  

See accompanying notes to condensed consolidated financial statements.



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AVALON HOLDINGS CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited)

(in thousands)



|                                                                                                       |  |                           |        |   |      |   |       |  
|------------------------------------------------------------------------------------------------------ |  | ------------------------- | ------ | - | ---- | - | ----- | -
|                                                                                                       |  | Six Months Ended June 30, |       
|                                                                                                       |  | 2007                      |        |   | 2006 |  
|Operating activities:                                                                                  |  |                           |        |   |      |   |       |  
|Income from continuing operations                                                                      |  | $                         | 602    |   |      | $ | 119   |  
|Reconciliation of income from continuing operations to cash provided by operating activities:          |  |                           |        |   |      |   |       |  
|Depreciation and amortization                                                                          |  |                           | 563    |   |      |   | 518   |  
|Amortization of investments                                                                            |  |                           |       |   |      |   | (3    | )
|Provision for losses on accounts receivable                                                            |  |                           | 1      |   |      |   | 6     |  
|Change in operating assets and liabilities:                                                            |  |                           |        |   |      |   |       |  
|Accounts receivable                                                                                    |  |                           | (363   | ) |      |   | (491  | )
|Prepaid expenses                                                                                       |  |                           | (104   | ) |      |   | (33   | )
|Other current assets                                                                                   |  |                           | (163   | ) |      |   | (42   | )
|Other assets, net                                                                                      |  |                           | 7      |   |      |   |      |  
|Accounts payable                                                                                       |  |                           | (157   | ) |      |   | 153   |  
|Accrued payroll and other compensation                                                                 |  |                           | 120    |   |      |   | 52    |  
|Accrued income taxes                                                                                   |  |                           | (5     | ) |      |   | (36   | )
|Other accrued taxes                                                                                    |  |                           | (17    | ) |      |   | (137  | )
|Other liabilities and accrued expenses                                                                 |  |                           | 220    |   |      |   | 248   |  
|Other noncurrent liabilities                                                                           |  |                           |       |   |      |   | (7    | )
|                                                                                                       |  |                           |        |   |      |   |       |  
|Net cash provided by operating activities from continuing operations                                   |  |                           | 704    |   |      |   | 347   |  
|Net cash provided by (used in) operating activities from discontinued operations                       |  |                           | 113    |   |      |   | (3    | )
|                                                                                                       |  |                           |        |   |      |   |       |  
|Net cash provided by operating activities                                                              |  |                           | 817    |   |      |   | 344   |  
|                                                                                                       |  |                           |        |   |      |   |       |  
|Investing activities:                                                                                  |  |                           |        |   |      |   |       |  
|Purchases of available-for-sale investments                                                            |  |                           |       |   |      |   | (68   | )
|Capital expenditures                                                                                   |  |                           | (4,571 | ) |      |   | (256  | )
|                                                                                                       |  |                           |        |   |      |   |       |  
|Net cash used in investing activities from continuing operations                                       |  |                           | (4,571 | ) |      |   | (324  | )
|Net cash provided by investing activities from discontinued operations                                 |  |                           |       |   |      |   | 1881  |  
|                                                                                                       |  |                           |        |   |      |   |       |  
|Net cash (used in) provided by investing activities                                                    |  |                           | (4,571 | ) |      |   | 1,557 |  
|                                                                                                       |  |                           |        |   |      |   |       |  
|Financing activities:                                                                                  |  |                           |        |   |      |   |       |  
|Payments on capital lease obligations                                                                  |  |                           | (10    | ) |      |   |      |  
|                                                                                                       |  |                           |        |   |      |   |       |  
|Net cash used in financing activities                                                                  |  |                           | (10    | ) |      |   |      |  
|                                                                                                       |  |                           |        |   |      |   |       |  
|(Decrease) increase in cash and cash equivalents                                                       |  |                           | (3,764 | ) |      |   | 1,901 |  
|Cash and cash equivalents at beginning of year                                                         |  |                           | 13,251 |   |      |   | 7,759 |  
|                                                                                                       |  |                           |        |   |      |   |       |  
|Cash and cash equivalents at end of period                                                             |  | $                         | 9,487  |   |      | $ | 9,660 |  
|                                                                                                       |  |                           |        |   |      |   |       |  
|Non cash investing activities:                                                                         |  |                           |        |   |      |   |       |  
|Capital expenditures of $1,211 are included in Accounts payable at June 30, 2007.                      |  |                           |        |   |      |   |       |  
|                                                                                                       |  |                          
|Non cash financing activities:                                                                         |  |                           |        |   |      |   |       |  
|A capital lease obligation of $114 was exchanged for an operating lease in the second quarter of 2007. |  |                           |        |   |      |   |       |  

See accompanying notes to condensed consolidated financial statements.



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AVALON HOLDINGS CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

June 30, 2007

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 2006 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 June 30, 2007, and the results of its 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 Per Share

Basic net income per share has been computed using the weighted average number of common shares outstanding
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 three and six months ended June 30, 2007 and 2006.

Note 3. Comprehensive Income

Comprehensive income is comprised of two
components: net income and other comprehensive income. Comprehensive income is the change in equity during a period from transactions and other events and circumstances from non-owner sources. Comprehensive income, net of related tax effects, is as
follows (in thousands):



|                                                 |  |                             |     |                           |   |      |  |      |     |  |   |    
|------------------------------------------------ |  | --------------------------- | --- | ------------------------- | - | ---- |  | ---- | --- |  | - | ---
|                                                 |  | Three Months Ended June 30, |     | Six Months Ended June 30,
|                                                 |  | 2007                        |     | 2006                      |   | 2007 |  | 2006
|Net income                                       |  | $                           | 363 |                           | $ | 481  |  | $    | 715 |  | $ | 483
|Unrealized gain on available-for-sale securities |  |                             |    |                           |   | 5    |  |      |    |  |   | 8  
|                                                 |  |                             |     |                           |   |      |  |      |     |  |   |    
|Comprehensive income                             |  | $                           | 363 |                           | $ | 486  |  | $    | 715 |  | $ | 491
|                                                 |  |                             |     |                           |   |      |  |      |     |  |   |    

Note 4. Discontinued Operations

In January 2004, Avalon sold all of the fixed assets of the remediation business and discontinued the operations of the engineering and consulting business. All income and expenses relating to these operations are
included in discontinued operations.



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In the second quarter of 2007, Avalons remediation business agreed to a settlement of $115,000 from a customer for
the payment of services provided on a project in 2002. The settlement is included in discontinued operations in the Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2007. The monies for the settlement
were received in May 2007 and are included in the Condensed Consolidated Statements of Cash Flows under the caption Net cash provided by operating activities from discontinued operations for the six months ended June 30, 2007.

In the second quarter of 2006, Avalon determined that the remediation business was no longer obligated to pay the remaining accounts payable associated
with a project from 2001 due to a settlement reached with its customer through arbitration. Therefore, Avalon wrote off approximately $.4 million of accounts payable and such amount is included in discontinued operations in the Condensed Statements
of Operations for the three and six months ended June 30, 2006.

Concurrent with the decision to discontinue the technical environmental engineering
and consulting business, Avalon decided to sell the building associated with the technical environmental services operations. Avalon sold the building in May 2006 and received $1.8 million which represented the selling price less the costs to sell
the building and is included in the Condensed Consolidated Statements of Cash Flows under the caption Net cash provided by investing activities from discontinued operations for the six months ended June 30, 2006. Avalon incurred a
loss of approximately $20,000 on the sale of the building which is included in discontinued operations.

On July 15, 2004, Avalon sold all of the
common stock of DartAmerica, Inc., Avalons transportation operations. As a result, all income and expenses relating to the transportation operations are included in discontinued operations.

Note 5. Legal Matters

In the ordinary course of conducting its business,
Avalon 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, will have a material adverse effect on its financial position or results of operations.

Note 6. Business Segment Information

In applying Statement of Financial Accounting Standards (SFAS) No. 131,
Disclosures About Segments of an Enterprise and Related 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 waste management services and golf and related operations. Avalon accounts for intersegment net operating revenues as if the transactions were with third parties. The segment disclosures are
presented on this basis for all periods presented.

Avalons primary business segment, the waste management services segment, provides hazardous and
nonhazardous waste disposal brokerage and management services to industrial, commercial, municipal and governmental customers and manages a captive landfill for an industrial customer. The golf and



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related operations segment includes the operations of golf courses, recreational facilities, clubhouses that provide dining and banquet facilities and a
travel agency. Avalon does not have significant operations located outside the United States and, accordingly, geographical segment information is not presented.

For the six months ended June 30, 2007, no customer individually accounted for 10% or more of Avalons consolidated net operating revenues. For the six months ended June 30, 2006, one customer and its affiliates accounted for
approximately 10% of the waste management services segments net operating revenues to external customers and approximately 8% of Avalons consolidated net operating revenues.

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



|                                                       |  |                             |        |   |                           |   |       |      |  |   |        |   |  |   |        |  
|------------------------------------------------------ |  | --------------------------- | ------ | - | ------------------------- | - | ----- | ---- |  | - | ------ | - |  | - | ------ | -
|                                                       |  | Three Months Ended June 30, |        |   | Six Months Ended June 30, |  
|                                                       |  | 2007                        |        |   | 2006                      |   |       | 2007 |  |   | 2006   |  
|Net operating revenues from:                           |  |                             |        |   |                           |   |       |      |  |   |        |   |  |   |        |  
|Waste management services:                             |  |                             |        |   |                           |   |       |      |  |   |        |   |  |   |        |  
|External customers revenues                            |  | $                           | 9,377  |   |                           | $ | 7,560 |      |  | $ | 19,558 |   |  | $ | 15,622 |  
|Intersegment revenues                                  |  |                             | 12     |   |                           |   |      |      |  |   | 12     |   |  |   |       |  
|                                                       |  |                             |        |   |                           |   |       |      |  |   |        |   |  |   |        |  
|Total waste management services                        |  |                             | 9,389  |   |                           |   | 7,560 |      |  |   | 19,570 |   |  |   | 15,622 |  
|                                                       |  |                             |        |   |                           |   |       |      |  |   |        |   |  |   |        |  
|                                                       |  |                             |        |  
|Golf and related operations:                           |  |                             |        |   |                           |   |       |      |  |   |        |   |  |   |        |  
|External customers revenues                            |  |                             | 2,157  |   |                           |   | 1,670 |      |  |   | 3,286  |   |  |   | 2,532  |  
|Intersegment revenues                                  |  |                             | 19     |   |                           |   | 18    |      |  |   | 26     |   |  |   | 25     |  
|                                                       |  |                             |        |   |                           |   |       |      |  |   |        |   |  |   |        |  
|Total golf and related operations                      |  |                             | 2,176  |   |                           |   | 1,688 |      |  |   | 3,312  |   |  |   | 2,557  |  
|                                                       |  |                             |        |   |                           |   |       |      |  |   |        |   |  |   |        |  
|Segment operating revenues                             |  |                             | 11,565 |   |                           |   | 9,248 |      |  |   | 22,882 |   |  |   | 18,179 |  
|Intersegment eliminations                              |  |                             | (31    | ) |                           |   | (18   | )    |  |   | (38    | ) |  |   | (25    | )
|                                                       |  |                             |        |   |                           |   |       |      |  |   |        |   |  |   |        |  
|Total net operating revenues                           |  | $                           | 11,534 |   |                           | $ | 9,230 |      |  | $ | 22,844 |   |  | $ | 18,154 |  
|                                                       |  |                             |        |   |                           |   |       |      |  |   |        |   |  |   |        |  
|                                                       |  |                             |        |  
|Income (loss) from continuing operations before taxes: |  |                             |        |   |                           |   |       |      |  |   |        |   |  |   |        |  
|Waste management services                              |  | $                           | 908    |   |                           | $ | 664   |      |  | $ | 1,894  |   |  | $ | 1,411  |  
|Golf and related operations                            |  |                             | (145   | ) |                           |   | (71   | )    |  |   | (316   | ) |  |   | (295   | )
|                                                       |  |                             |        |   |                           |   |       |      |  |   |        |   |  |   |        |  
|Segment income before taxes                            |  |                             | 763    |   |                           |   | 593   |      |  |   | 1,578  |   |  |   | 1,116  |  
|Corporate interest income                              |  |                             | 109    |   |                           |   | 118   |      |  |   | 232    |   |  |   | 216    |  
|Corporate other income, net                            |  |                             | 2      |   |                           |   | 3     |      |  |   | 4      |   |  |   | 5      |  
|General corporate expenses                             |  |                             | (621   | ) |                           |   | (604  | )    |  |   | (1,209 | ) |  |   | (1,218 | )
|                                                       |  |                             |        |   |                           |   |       |      |  |   |        |   |  |   |        |  
|Income from continuing operations before taxes         |  | $                           | 253    |   |                           | $ | 110   |      |  | $ | 605    |   |  | $ | 119    |  
|                                                       |  |                             |        |   |                           |   |       |      |  |   |        |   |  |   |        |  
|                                                       |  |                             |        |  
|Interest income:                                       |  |                             |        |   |                           |   |       |      |  |   |        |   |  |   |        |  
|Waste management services                              |  | $                           | 21     |   |                           | $ | 20    |      |  | $ | 46     |   |  | $ | 43     |  
|Golf and related operations                            |  |                             | 3      |   |                           |   | 3     |      |  |   | 7      |   |  |   | 5      |  
|Corporate                                              |  |                             | 109    |   |                           |   | 118   |      |  |   | 232    |   |  |   | 216    |  
|                                                       |  |                             |        |   |                           |   |       |      |  |   |        |   |  |   |        |  
|Total                                                  |  | $                           | 133    |   |                           | $ | 141   |      |  | $ | 285    |   |  | $ | 264    |  
|                                                       |  |                             |        |   |                           |   |       |      |  |   |        |   |  |   |        |  



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##### Table of Contents

|                                        |  |              |         |   |                  |   |         |  
|--------------------------------------- |  | ------------ | ------- | - | ---------------- | - | ------- | -
|                                        |  | June 30,2007 |         |   | December 31,2006 |  
|Identifiable assets:                    |  |              |         |   |                  |   |         |  
|                                        |  |             
|Waste management services               |  | $            | 10,089  |   |                  | $ | 8,082   |  
|Golf and related operations             |  |              | 26,829  |   |                  |   | 21,188  |  
|Corporate                               |  |              | 37,485  |   |                  |   | 37,587  |  
|                                        |  |              |         |   |                  |   |         |  
|Subtotal                                |  |              | 74,403  |   |                  |   | 66,857  |  
|Elimination of intersegment receivables |  |              | (26,489 | ) |                  |   | (20,906 | )
|                                        |  |              |         |   |                  |   |         |  
|Total                                   |  | $            | 47,914  |   |                  | $ | 45,951  |  
|                                        |  |              |         |   |                  |   |         |  

The increase in identifiable assets of the waste management services segment is primarily a result of an increase
in intersegment transactions which are eliminated in consolidation and an increase in accounts receivable. The increase in identifiable assets of the golf and related operations segment is primarily due to capital expenditures for the construction
and renovation of the Sharon Country Club facility, the assets of which were acquired in October 2006.

Note 7. Recently Issued Financial Accounting
Standards

Avalon adopted the provisions of Financial Accounting Standards Board (FASB) Interpretation 48 (FIN 48), Accounting
for Uncertainty in Income Taxes on January 1, 2007. As required by FIN 48, which clarifies FASB 109, Accounting for Income Taxes, Avalon recognizes the financial statement benefit of a tax position, only after determining that
the relevant tax authority would be more likely than not to sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a
greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. At the adoption date, Avalon applied FIN 48 to all tax positions for which the statute of limitations remained open. The adoption of FIN
48 had no material impact on Avalons financial position or results of operations for the first six months of 2007 and required no adjustment to the opening balance sheet accounts as of December 31, 2006.

Avalon is subject to income taxes in the U.S. federal and various states jurisdictions. With few exceptions, Avalon is no longer subject to U.S. federal, state and local
income tax examinations by taxing authorities for the years before 2003.

Avalon recognizes any interest and penalty assessed by taxing authorities as a
component of interest expense and other expense, respectively. Avalons accruals for the payment of interest and penalties at January 1, 2007 and for the six months ended June 30, 2007 were not material.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (SFAS No. 157), which defines fair value, establishes a framework for
measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 does not require any new measurements, but provides guidance on how to measure fair value by providing a fair
value hierarchy used to classify the source of information. This statement is effective for Avalon beginning January 1, 2008. Avalon is currently assessing the potential impact that the adoption of SFAS No. 157 will have on its financial
statements.



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##### Table of Contents

|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 six months of 2007, Avalon utilized cash and cash provided from operations to fund capital expenditures and meet operating needs.

Avalons aggregate capital expenditures in 2007 are estimated to be in the range of $8 million to $9 million, which will relate principally to the construction
costs of renovating and building additional banquet and recreational facilities at the Sharon Country Club, which was purchased in October 2006. Construction is expected to be completed in the third quarter of 2007. During the first six months of
2007, capital expenditures for Avalon totaled approximately $5.8 million which was principally related to such construction costs.

Avalon entered into a
long-term agreement with Squaw Creek Country Club to lease and operate its golf course and related facilities. The lease, which commenced November 1, 2003, has an initial term of ten (10) years with four (4) consecutive ten
(10) year renewal term options unilaterally exercisable by Avalon. Under the lease, Avalon is obligated to pay $15,000 in annual rent and make leasehold improvements of $150,000 per year. Amounts expended by Avalon for leasehold improvements
during a given year in excess of $150,000 will be carried forward and applied to future leasehold improvement obligations. Avalon has made $6.6 million of leasehold improvements as of June 30, 2007. Based upon the amount of leasehold
improvements already made and leasehold improvements anticipated to be made in the future, Avalon expects to exercise all of its renewal options.

Working
capital was $9.2 million at June 30, 2007 compared with $13.7 million at December 31, 2006. The decrease is primarily due to utilizing cash for construction and renovation of the Sharon Country Club and an increase in accounts payable
relating to such construction, partially offset by an increase in accounts receivable of the golf and related operations segment as a result of an increase in the membership of the Avalon Golf and Country Club.



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##### Table of Contents

The increase in other current liabilities and accrued expenses at June 30, 2007 compared with December 31, 2006
is primarily due to an increase in deferred revenues relating to membership dues of the golf and related operations segment. Such deferred revenues increased from $1.7 million at December 31, 2006 to $1.8 million at June 30, 2007.

Management believes that anticipated cash provided from future operations, existing 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.

Several private country clubs in the northeast Ohio area are experiencing economic difficulties. Avalon believes some of these clubs may represent an attractive investment opportunity and is giving consideration to
the possibility of acquiring one or more additional golf courses. Avalon will continue to consider acquisitions that make economic sense. Such potential acquisitions could be financed by existing working 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 second quarter of 2007 increased to $11.5 million compared with $9.2 million in the prior years second quarter. The increase is primarily the result of higher net operating revenues of the waste management services segment and,
to a lesser extent, an increase in the net operating revenues of the golf and related operations segment. Costs of operations increased to $9.7 million in the second quarter of 2007 compared with $7.8 million in the prior year quarter. The increase
in costs of operations is primarily due to higher net operating revenues of the waste management services segment in which costs have a direct relationship to revenues. Consolidated selling, general and administrative expenses increased in the
second quarter of 2007 compared with the second quarter of 2006. Avalon recorded income from continuing operations of $.3 million or $.07 per share for the second quarter of 2007 compared with income from continuing operations of $.1 million or $.03
per share in the second quarter of 2006.

For the first six months of 2007, net operating revenues increased to $22.8 million compared with $18.2 million
for the first six months of 2006. The increase is primarily the result of higher net operating revenues of the waste management services segment and, to a lesser extent, an increase in the net operating revenues of the golf and related operations
segment. Costs of operations were $19.2 million for the first six months of 2007 compared with $15.3 million for the first six months of 2006. The increase in costs of operations is primarily due higher net operating revenues of the waste management
services segment in which costs have a direct relationship to revenues. Consolidated selling, general and administrative expenses increased to $3.4 million for the first six months of 2007 compared with $3.1 million for the first six months of 2006.
Avalon recorded income from continuing operations of $.6 million or $.16 per share for the first six months of 2007 compared with income from continuing operations of $.1 million or $.03 per share for the prior year period.



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Performance in the Second Quarter of 2007 compared with the Second Quarter of 2006

Segment performance

Segment performance should be read in conjunction
with Note 6 to the Condensed Consolidated Financial Statements.

Net operating revenues of the waste management services segment increased to $9.4 million
in the second quarter of 2007 compared with $7.6 million in the second quarter of the prior year. The increase in net operating revenues is primarily the result of an increase in the level of waste brokerage and management services provided. Net
operating revenues of the captive landfill management operations also increased slightly in the second quarter of 2007 compared with the second quarter of the prior year primarily due to an increase in the amount of waste disposed of at the
landfill. Income from continuing operations before taxes for the waste management services segment was $.9 million in the second quarter of 2007 compared with $.7 million in the second quarter of 2006. The increase is primarily a result of the
increase in net operating revenues of the waste brokerage and management operations. Income from continuing operations of the captive landfill operations increased slightly in the second quarter of 2007 compared with the second quarter of the prior
year.

Net operating revenues of the golf and related operations were $2.2 million in the second quarter of 2007 compared with $1.7 million in the second
quarter of the prior year. The increase in net operating revenues is primarily due to an increase in the average number of members during the second quarter of 2007 compared with the second quarter of 2006 and increased merchandise, food and
beverage sales. The golf and related operations segment incurred a loss from continuing operations before taxes of $145,000 in the second quarter of 2007 compared with a loss from continuing operations before taxes of $71,000 in the second quarter
of the prior year. The increased loss from continuing operations before taxes is primarily due to the settlement of an employment contract dispute, increased depreciation expense, increased employee and operating costs associated with the Squaw
Creek facilities and additional costs associated with the Sharon Country Club while the facility is closed for construction and renovation, partially offset by increased membership dues.

Interest income

Interest income was $133,000 in the second quarter of 2007 compared with $141,000 in the second
quarter of 2006. The decrease is primarily the result of lower average cash and cash equivalents invested during the second quarter of 2007 compared with the second quarter of the prior year.

General corporate expenses

General corporate expenses were $.6
million in both the second quarter of 2007 and 2006.



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##### Table of Contents

Net income

Avalon
recorded net income of $.4 million in the second quarter of 2007 compared with net income of $.5 million in the second quarter of the prior year. Avalons overall effective tax rate, excluding the effect of some minor state income tax
provisions, was 0% in the second quarter of 2007 and 2006. The income tax provision for the second quarter of 2007 and the deferred tax benefit for the second quarter of 2006 were offset by a change in the 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. The overall effective tax rate is different than statutory rates primarily due to a change in the
valuation allowance.

Performance in the first six months of 2007 compared with the first six months of 2006

Segment performance

Segment performance should be read in conjunction
with Note 6 to the Condensed Consolidated Financial Statements.

Net operating revenues of the waste management services segment increased to $19.6 million
in the first six months of 2007 compared with $15.6 million in the first six months of the prior year. The increase in net operating revenues is primarily the result of an increase in the level of waste brokerage and management services provided
including two one-time projects in the first quarter which amounted to approximately $.8 million in net operating revenues. Net operating revenues of the captive landfill management operations also increased in the first six months of 2007 compared
with the first six months of 2006 primarily as a result of an increase in the amount of waste disposed of at the landfill. Income before taxes for the waste management services segment increased to $1.9 million in the first six months of 2007
compared with $1.4 million in the first six months of the prior year. The increase is primarily a result of the increase in the net operating revenues of the waste brokerage and management operations in the first six months of 2007 compared with the
first six months of the prior year. Income from continuing operations before taxes of the captive landfill operations increased slightly in the first six months of 2007 compared with the first six months of 2006.

Net operating revenues of the golf and related operations segment were $3.3 million in the first six months of 2007 compared with $2.6 million in the first six months of
the prior year. The golf courses, which are located in northeast Ohio and western Pennsylvania, were unavailable for play during the first three months of 2007 and 2006 due to adverse weather conditions. The increase in net operating revenues is
primarily due to an increase in the average number of members during the first six months of 2007 compared with the first six months of 2006 and increased merchandise, food and beverage sales. The golf and related operations segment incurred a loss
from continuing operations before taxes of $316,000 in the first six months of 2007 compared with a loss from continuing operations before taxes of $295,000 in the first six months of the prior year. The increased loss from continuing operations
before taxes is primarily due to the settlement of an employment contract dispute, increased depreciation expense, increased employee and operating costs associated with the Squaw Creek facilities and additional costs associated with the Sharon
Country Club while the facility is closed for construction and renovation, partially offset by increased membership dues.



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##### Table of Contents

Interest income

Interest income was $285,000 in the first six months of 2007 compared with $264,000 in the first six months of 2006. The increase is primarily the result of higher average cash and cash equivalents invested during the first six months of
2007 compared with the first six months of the prior year.

General corporate expenses

General corporate expenses were $1.2 million in both the first six months of 2007 and 2006.

Net income

Avalon recorded net income of $.7 million in the first six months of 2007 compared with net income of $.5 million in the first six months of the prior year.
Avalons overall effective tax rate, excluding the effect of some minor state income tax provisions, was 0% in both the first six months of 2007 and 2006. The income tax provision for the first six months of 2007 and 2006 was offset by a change
in the 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. The overall effective tax rate differs from
statutory rates primarily due to the change in the valuation allowance.

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, management assesses the probability of loss and accrues a liability as appropriate. Avalon does not believe that any uninsured ultimate liabilities, fines or penalties resulting from
such pending proceedings, individually or in the aggregate, will have a material adverse effect on its financial position or results of operations.

The
Board of Directors of Avalon has explored the possibility of delisting Avalons common stock by reducing the number of shareholders of record below 300, thereby eliminating the requirements for compliance with the Sarbanes-Oxley Act (the
Act). Avalon believes compliance with the requirements of the Act could be very costly. However, as a result of the Securities and Exchange Commissions (SEC) decision to extend the compliance deadline under
Section 404 of the Act (SOX 404) for small public companies and the ongoing review by the SEC of how to minimize the costly impact of SOX 404 on small companies, the Board of Directors has decided not to pursue delisting at this
time, but intends to review the situation again as future developments warrant.

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 portion of Avalons waste brokerage and management operations revenues is derived from the disposal and/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 negative effect on Avalon.



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##### Table of Contents

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 may cause disposal pricing to
increase. In addition, consolidation has had 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.

A significant portion of Avalons business is generated from waste brokerage and management services provided to customers and 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
captive landfill management business is dependent upon a single customer as its sole source of revenue. If the captive landfill management business is unable to retain this customer, Avalons future financial performance could be adversely
impacted.

Economic challenges throughout the industries served by Avalon have resulted in payment defaults by customers. While Avalon continuously
endeavors to limit customers credit risks, customer-specific financial downturns are not controllable by management. Significant customer payment defaults would have a material adverse impact upon Avalons future financial performance.

The Avalon Golf and Country Club has a championship golf course and clubhouse at both the Avalon Lakes and Squaw Creek facilities. In addition, the Squaw
Creek facility has a swimming pool, tennis courts, a fitness center and dining and banquet facilities. In addition, in October 2006 Avalon purchased the primary assets of the Sharon Country Club, which includes a golf course and clubhouse.
Currently, Avalon is renovating the clubhouse and constructing additional banquet and recreational facilities. The Avalon Golf and Country Club competes with many public courses and country clubs in the area. Although the golf courses continue to be
available to the general public, the primary source of revenues is derived from the members of the Avalon Golf and Country Club. Avalon believes that the combination of these three facilities will result in a significant increase in the number of
members of the Avalon Golf and Country Club. Although there has been a substantial increase in the number of members of the Avalon Golf and Country Club, as of June 30, 2007, Avalon has not attained its membership goals. There can be no
assurance as to when such increased membership will be attained and when the golf and related operations will ultimately become profitable. Failure by Avalon to attain increased membership could adversely affect the future financial performance of
Avalon.

All three of Avalons golf course operations currently hold liquor licenses for their respective facilities. If, for some reason, any one of
these facilities were to lose its liquor license, the financial performance of the golf and related operations would be adversely affected.

Avalons
operations are somewhat seasonal in nature since a significant portion of those operations are primarily conducted in selected northeastern and midwestern states. Additionally, Avalons golf courses are located in northeast Ohio and western
Pennsylvania and are significantly dependent upon weather conditions during the golf season. As a result, Avalons financial performance is adversely affected by adverse weather conditions.



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##### Table of Contents

Management is currently evaluating Avalons strategic direction for the future. While there are no specific
transactions under negotiation or pending at this time, Avalon does not necessarily intend to limit itself in the future to lines of business which it has historically conducted.



|Item 3. | Quantitative and Qualitative Disclosures about 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 from continuing operations before taxes. 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.



|Item 4. | Controls and Procedures
|------- | -----------------------

Avalons management, including the
Chief Executive Officer and Chief Financial Officer, has conducted an evaluation of the effectiveness of disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based on that evaluation, the Chief Executive Officer and Chief
Financial Officer concluded that the disclosure controls and procedures are effective in ensuring that all material information required to be filed in this quarterly report has been made known to them in a timely fashion. There have been no
significant changes in internal controls, or in factors that could significantly affect internal controls, subsequent to the date the Chief Executive Officer and Chief Financial Officer completed their evaluation.



16



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##### Table of Contents

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, 2006 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 27, 2007; 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
| | --- | --------

Exhibit 31.1 Certification pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 31.2 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.

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.

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.



| | (b) | Reports on Form 8-K
| | --- | -------------------



| | (c) | None
| | --- | ----



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SIGNATURE

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



|                      |  |                             |  |                                                                                                                                  
|--------------------- |  | --------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------
|                      |  | AVALON HOLDINGS CORPORATION
|                      |  | (Registrant)               
|                      |  |                            
|Date: August 10, 2007 |  | By:                         |  | /s/ Timothy C. Coxson                                                                                                            
|                      |  |                             |  | Timothy C. Coxson, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer and Duly Authorized Officer)



18