SECURITIES AND EXCHANGE COMMISSION

FORM 10-K

Annual Report Under Section 13 or 15(d)
of the Securities and Exchange Act of 1934

For the Fiscal Year Ended December 31, 2000
Commission File No. 0-17536



SEVENSON ENVIRONMENTAL SERVICES, INC.(Exact name of registrant as specified in its charter)





|New York
     (State of Incorporation) | 16-1091535              
   
(IRS Employer Identification No.)
|-------------------------------------- | --------------------------------------------------------------





| | 2749 Lockport RoadNiagara Falls, NY 14305-2229
(Address of principal executive offices) | 
| | --------------------------------------------------------------------------------------- | 





| | (716) 284-0431

(Registrant's telephone number, including area code)
Securities Registered Pursuant to Section 12(b) of the Act: None
Securities Registered Pursuant to Section 12(g) of the Act:Common Stock(Title of Class) | 
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 



Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes XNo

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

Cover Page 1 of 2 Pages
Exhibit Index appears on Page 15



As of March 14, 2001, 2,520,914 shares of Common Stock were outstanding, and the aggregate market value (based on the closing bid price quoted on the National Market tier of the NASDAQ Stock Market on March 14, 2001) of the Common
Stock held by non-affiliates was approximately $27.7 million. As of the same date, 7,968,931 shares of Class B Common Stock were outstanding.



------------------------------------------------------------

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant's Proxy Statement for its 2001 Annual Meeting of Stockholders are incorporated by reference into Part II hereof. Portions of the Registrant's 2000 Annual Report to Stockholders are incorporated by reference into
Part III hereof.







Cover Page 2 of 2 Pages
Exhibit Index appears on Page 15

PART I

|ITEM 1. | BUSINESS
|------- | --------

General

Sevenson provides a comprehensive range of field services for the remediation of sites and facilities contaminated by hazardous materials ("site remediation"). These services include on-site treatment, containment, and excavation
and removal of contaminated materials. The Company also decontaminates, demolishes and closes contaminated industrial facilities and provides industrial cleaning services. Sevenson has performed site remediation field services since 1979, when it was
selected as the principal contractor for the remediation of the Love Canal site in Niagara Falls, New York. The Company has also participated as an investor in ventures which acquire, clean up and sell contaminated sites ("brownfields").

The Company's strategy has been to capitalize on its extensive hazardous waste site remediation experience. The Company is one of only a few national companies recognized for its high degree of expertise in site remediation services.

The Company does not own or operate offsite hazardous waste transportation, storage or disposal facilities. When required, the Company contracts with others for these services.

Since its inception, the Company has been successful in marketing its services to both private and public sector customers. The following table summarizes revenue contribution from these customers during the last three years:

|Contract Revenues
(in Millions) | Years Ended December 31
|------------------------------- | -----------------------
|                                | 2000                   
|Public Sector                   | $  52.1 (41%)          
|Private Sector                  | $  74.4 (59%)          
|                                |                        
|Total                           | $ 126.5                

The Company's customers include major industrial corporations and government agencies. Since entering the business in 1979, the Company has performed over 800 contracts, including contracts at 86 Superfund sites, with a
combined value of over $1 billion.

In performing its services, Sevenson emphasizes safety, quality, timeliness and cost. The Company performs most work with its own employees and equipment, which allows the Company to maintain a high degree of control over its operations.

The Company operates nationwide, but most of its operations are in the eastern United States. It currently operates through offices in Niagara Falls, New York, Pittsburgh (Delmont, Pennsylvania), Philadelphia (Chadds Ford,
Pennsylvania), Chicago (Merrillville, Indiana) and Los Angeles (Long Beach, California). The operations of Waste Stream Technology Inc., the Company's laboratory subsidiary, are conducted at office, laboratory and shop facilities in Buffalo, New York.

The Remediation Process

The remediation process consists of three phases; site assessment, remedial design, and, finally, field cleanup operations. The site assessment phase is largely investigative, involving a detailed evaluation of the hazardous waste
problem and the consideration of alternative solutions. The remedial design phase involves the preparation of a detailed remediation plan for the chosen solution. The third phase is the field implementation of the site remediation plan, which can include
on-site treatment, containment, and excavation and removal of contaminated materials.

The Company's business is performing this third phase, the actual cleanup or "remediation" of a site. In so doing, the Company draws on project management expertise derived from over 20 years of hazardous waste site remediation
experience. The Company believes that this expertise enables it to accurately assess the costs and risks of site remediation projects and that its experience and reputation for safe and timely completion of such projects give it a competitive advantage,
especially for larger and more difficult projects.

While some firms in the environmental business offer services in more than one phase of the remediation process, the Company has chosen to focus on field cleanup operations. Sevenson believes that substantial business opportunities
exist for the site remediation services which the Company provides and that broad-based public support for the cleanup of hazardous waste sites ensures that such opportunities will continue to flow.

Market Dynamics

Hazardous waste contamination of the environment first came to national attention in 1978 with publicity regarding the Love Canal site in Niagara Falls, New York. In the years that followed, public concern was heightened by the
discovery of thousands of additional contaminated sites throughout the country and by the growing perception of the public health risk posed by these sites. In response to public concern, several regulatory statutes were enacted including the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ("Superfund"), the Superfund Amendments and Reauthorization Act of 1986 ("SARA"), and the RCRA Amendments of 1984, among others.

The Superfund program, other regulatory programs and pressure from Congress and the general public for the cleanup of hazardous waste sites sustain demand for site remediation services provided by the Company.

According to the EPA, as of January 23, 2001 there were 1,297 existing and proposed sites on the EPA's National Priorities List ("NPL"), of those 759 were listed as construction completed. In addition to the NPL sites, there are
thousands of other lesser contaminated sites which will require cleanup. As more hazardous waste sites move out of the study and design phases of the remediation process, the demand for site remediation services will increase.



Private sector expenditures for site remediation result in part from federal, state and local government efforts to force potentially responsible parties ("PRPs") to address and fund the remediation of contaminated sites. PRPs often
take responsibility for the remediation process in an effort to control and minimize their liability. If the PRPs are not identifiable or decline to accept responsibility for a site, federal, state or local government agencies may fund the project
directly and take legal action against the identifiable PRPs for recovery of expenses and damages. Also, regulations for the RCRA Corrective Action Program, which addresses the clean-up of active manufacturing facilities, result in private sector cleanup
projects.

Company Services

The Company's site remediation field services include on-site treatment, containment, and excavation and removal of contaminated materials and the decontamination and demolition of closed industrial plants. The Company provides one
or a combination of these services, as required for the specific project.

On-Site Treatment.  On-site treatmentinvolves treating hazardous materials at the site toreduce or eliminate the hazardous properties of the materials. On-site treatment includes a variety of
techniques which either eliminate the substance permanently, reduce its toxicity or volume, or stabilize its constituents for disposal on-site or off-site at a permitted disposal facility. Treatment methods used by the Company include stabilization and
fixation, filtration, dewatering, air stripping and carbon adsorption, precipitation, bioremediation and thermal treatment.

Stabilization and fixation are used for organic material (such as petroleum products, solvents, and certain chemicals) and inorganic material (such as heavy metals). Generally, these involve mixing a reagent (such as kiln dust,
fly ash, cement, lime or clay) with the contaminated material in order to form a solid, semi-impermeable mixture which can be more easily handled for transportation and eventual disposal in an on-site or off-site facility. Fixating agents can be mixed
with inorganic material to chemically bond or physically encapsulate the material to reduce the potential for migration to other areas.

Filtration involves passing contaminated liquids through a filtering media, such as sand, diatomaceous earth or fabric, to separate solid contaminants from the base liquid.

Dewatering involves pumping semi-liquid waste into a press which separates solids and liquids under pressure.

Air stripping and carbon adsorption involve passing contaminated liquids through a chamber of counterflowing forced air which strips away volatile contaminants. This air is then passed through an activated carbon filter which
absorbs the contaminants.

Precipitation utilizes an agent which chemically reacts with soluble contaminants in a liquid, separating the contaminants from the base liquid. These contaminants can then be removed for treatment or disposal.

Bioremediation utilizes naturally-occurring microorganisms to degrade certain organic contaminants to reduce the level of contamination to within approved limits. Bioremediation can be a particularly effective solution for
petroleum, petroleum derivatives, and wood and pulp wastes.

Thermal Treatment involves the application of heat to remove and destroy contaminants present in a matrix, typically soil.

Containment.  Containment systems are constructed to prevent the migration of hazardous materials from a site to the surrounding groundwater, surface water, soil or air. While containment can be a permanent
remedial solution, it is also used as an interim step that is followed by excavation and removal or onsite treatment. The types of containment systems that the Company installs include containment cells, surface caps and slurry walls.

Containment cells are constructed to hold contaminated materials and prevent them from escaping into the surrounding environment. Construction typically requires the excavation and placement of soil, the building and
installation of leachate collection systems, and the installation of clay and synthetic liners.

Surface caps are built over contaminated zones to prevent rainwater and surface water from entering the zone, becoming contaminated, and ultimately migrating to surrounding soil and groundwater. Surface caps can be installed on
older landfills or surface impoundments as a permanent remedial solution or as a temporary measure prior to other forms of remediation. They are also installed on newly filled containment cells to provide long-term closure. These caps are typically made
of clay and synthetic liners, which are covered with soil and plantings.

Slurry walls are relatively impermeable vertical barriers built below ground around a source of contamination to prevent the lateral movement of contaminated groundwater from the contaminated zone to the surrounding area. The
walls extend from the ground surface down to an impermeable underground layer such as natural clay. Slurry walls are semi-permanent barriers which provide a relatively impermeable wall. The construction of slurry walls involves special techniques for
constructing deep, narrow trenches and the careful mixing and placement of slurry (special mixture of water, clay and other materials).

Excavation and Removal.  Excavation and removal involves the excavation of contaminated materials for containment, on-site treatment, or off-site disposal. When off-site disposal is required the Company
subcontracts with licensed third parties for the transportation of the material for off-site disposal. As part of its quality control program, the Company regularly samples and analyzes excavated materials to verify that the contaminants are consistent
with those identified in the remediation plan. To avoid undue liability exposure associated with the transportation and disposal of hazardous materials, the Company, as a matter of policy, will not assume title to, or the status of "generator" for such
materials. Typically, the customer retains the status of generator and owner of the materials until disposal at which time the disposal facility operator assumes ownership.

Facilities Decontamination, Demolition and Closure

In addition to site remediation, the Company provides decontamination, demolition and closure services for deactivated industrial facilities. Company personnel use various techniques to decontaminate facilities for reuse or prior
to demolition and closure. Demolition and closure services include dismantling large structures, draining liquid wastes from pipes and tanks, removing above and below-ground tanks, cleaning and disposing of contaminated equipment, and controlled
demolition. While the Company may remove relatively small amounts of asbestos incident to its facilities decontamination services, it does not generally perform asbestos removal.

Industrial Cleaning Services

The Company uses hydroblasting and vacuuming to dislodge and remove deposits, wastes and debris from boilers, process equipment, pipes, tubes, drains, vessels, sumps and other facilities in operating industrial plants.
Hydroblasting is the application of high pressure (up to 10,000 psi) streams of water to the area or surface to be cleaned. Vacuuming is accomplished using truck mounted wet/dry vacuum units capable of moving up to 5,000 cubic feet of air per minute.

Brownfields

The Company has participated in ventures which acquire, cleanup and sell contaminated sites ("brownfields"). The Company's participation generally has involved acting through a subsidiary as an investor in the venture, as well as
the remediation contractor. The Company is not actively seeking new brownfields ventures.

Operations

Project Management.  At the proposal stage, each major project is assigned to one of the Company's Operations Divisions. Project proposals are prepared under the supervision of the Operations Division Manager by
estimators who have broad experience in project management and field operations, and who are therefore knowledgeable in assessing the cost and time frame required to complete a project. Estimators work with field and technical personnel on an ongoing
basis to keep current on changes in the Company's operating capabilities. When a contract is obtained, the project is assigned a project manager who maintains overall project responsibility, a project engineer who tracks progress and is responsible for
quality control, a superintendent who is responsible for all field operations, and a safety officer who is responsible for implementing the site safety plan. Field production and related costs are monitored daily by the project engineer and project
manager. On a weekly basis such costs are reviewed by the Operations Division Manager and compared against the original project budgets.

Quality Control.  To ensure and document that remediation plan requirements are met, the Company develops a quality control program for each project. Such a program involves a schedule of observation, sampling and
testing throughout each phase of the project to determine whether project specification requirements are being achieved.

Health and Safety.  For each project, the Company's health and safety staff develops a comprehensive health and safety program designed to address the specific exposures anticipated to be encountered during the
project. The programs generally address daily employee hygiene, use of required safety devices, monitoring of hazards, and employee training. Every program requires the monitoring of employee health through physicals at the beginning and end of the
project for all employees. The Company's commitment to health and safety is reflected by citations and awards which the Company has received from both public and private sector customers and by the Company's Workers Compensation experience rating which
has consistently indicated a loss rate well below average.

Equipment.  The Company seeks to maintain high utilization of its equipment. Prior to purchasing specialized equipment, the Company first determines how the cost of such equipment can be fully amortized over one or two
projects. The Company seeks to avoid purchasing equipment which will not provide an immediate, substantial return on investment and also a continuing, regular return thereafter.

Marketing

Sevenson's markets its services nationwide with concentration in the eastern United States.

The Company's marketing activities are primarily conducted by senior technical and management professionals. They are responsible for contacting appropriate representatives of corporations known to have specific problems and
maintaining communication with consulting engineering firms, analytical laboratories and specialty contractors as a source of potential new business. The Company also participates in industrial and hazardous waste trade shows. In the public sector, the
Company monitors government contract procurements and responds to requests for proposals and for competitive bids.

Approximately 34%, 57% and 71% of revenues for 2000, 1999 and 1998, respectively, were the result of work awarded on the basis of competitive bids in both the public and private sectors.

Customers

The Company's two largest customers in 2000 accounted for 27% and 10% of 2000 revenues. The Company's two largest customers in 1999 accounted for 22% and 18% of 1999 revenues. The Company's two largest customers in 1998 accounted
for 28% and 14% of 1998 revenues. No other customer accounted for more than 10% of total revenues in any of the three years in the period ended December 31, 2000. Because of the nature of the Company's business, which involves large, discrete contracts
often completed within one year, customers that account for a significant portion of revenue in one year may represent an immaterial portion of revenue in subsequent years. The Company believes that the loss of the United States government as a customer
would have a material adverse effect on its business.

For the year 2000, the Company had revenues of $33 million from United States government contracts which were awarded based on competition restricted to "small business" firms. To qualify as a "small business" a firm must have averaged
fewer than 500 employees over the latest 12 month period. For the 12 months ended December 31, 2000, the Company's average was just over 471 employees. At the Company's current level of activity, the Company expects its "small business" status to continue.

Backlog

On December 31, 2000, the Company had an estimated backlog of work under contracts believed to be firm of approximately $93.7 million, as compared with an estimated backlog of approximately $112.6 million and $91.1 million on
December 31, 1999 and 1998, respectively.

The value of backlog is subject to change as the scope of work on projects changes. Customers generally retain the right to change the scope of work with an appropriate increase or decrease in the contract price. Customers also usually
retain the right to terminate contracts with the Company at any time, with or without cause. As a result, substantially all of the Company's backlog of $93.7 million at December 31, 2000 is subject to such right of termination.

For the foregoing reason and others, the Company believes that backlog is not necessarily indicative of revenues to be earned by the Company in the current year or subsequent periods.

Insurance and Bonding

The Company currently maintains general liability insurance policies with aggregate limits of $22 million. These policies contain standard exclusions, including exclusions of claims arising out of actual, alleged or threatened
discharge, dispersal or release of pollutants. Some projects prior to September 30, 1999 were covered, and all operations since that date are covered, by pollution liability insurance.

In general, government entities, and to a lesser extent, private sector customers, require the Company to obtain surety bonds as security for the Company's completion of a contract.

The Company has been able to secure all the insurance and surety bonding required by all contracts which it has received. However, there is no assurance that insurance will continue to be available, that the possible types of
liabilities that may be incurred by the Company will be covered by its insurance or that the liabilities incurred by the Company, although covered, will not exceed the limits of such policies. Also, there is no assurance that the Company will continue to
be able to obtain surety bonds or that the surety bonds the Company is able to obtain will be adequate for its business needs.

Competition

The Company competes with both small and large companies in each aspect of its business, although no company is dominant.

Some of the Company's competitors possess certain capabilities which the Company does not, including professional engineering services and off-site transportation, storage and disposal capabilities. When required, the Company contracts
for these services, but the broader capabilities of some of the Company's competitors may give them an advantage in obtaining certain projects.

The Company believes the principal competitive factors in the site remediation industry are price, reputation, experience, technical proficiency and financial strength. The Company believes it effectively competes on the basis of these
factors.

Regulation

General.  The Company's customers, including federal and state governments and owners and operators of contaminated sites and facilities and other parties responsible for facility and site cleanup, are subject to
extensive and evolving environmental laws and regulations administered by the EPA and various other federal, state and local environmental, safety and health agencies and authorities. These laws contribute to the demand for the Company's services.
Although the Company's customers remain responsible by law for their environmental problems, the Company must itself comply with the requirements of those laws applicable to its services. The Company believes it is in substantial compliance with all
federal, state and local laws and regulations governing its business.

RCRA.  The Resource Conservation and Recovery Act of 1976, as amended in 1984 ("RCRA"), is the principal federal statute governing hazardous waste generation, treatment, storage and disposal. RCRA, or EPA-approved
state programs at least as stringent, govern any waste handling activities involving substances classified as "hazardous". Regulations under RCRA for hazardous waste generators, transporters and owners and operators of hazardous waste treatment, storage
or disposal facilities impose detailed operating, inspection, training, emergency preparedness and response standards and requirements for closure, continuing financial responsibility, manifesting, record keeping and reporting.

Superfund.  The Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("Superfund") generally addresses the cleanup of sites at which hazardous substances are located and have been released or
are threatened to be released into the environment. Superfund imposes joint and several liability costs of cleanup and damages to natural resources upon: (a) certain owners or operators of hazardous waste sites; (b) any person who arranged for the
disposal, transport or treatment by any other party of hazardous substances owned or possessed by such person; and (c) certain transporters of hazardous substances. In addition, under the authority of Superfund and its implementing regulations, detailed
requirements apply to the manner and degree of remediation of facilities and sites where hazardous substances have been or are threatened to be released into the environment.

Among other things, Superfund authorizes the federal government either to remediate sites at which hazardous substances were disposed of and have been or are threatened to be released into the environment or to order, or offer an
opportunity to, persons potentially liable for the hazardous substances to do so. In addition, Superfund requires the EPA to establish a National Priorities List ("NPL") of sites at which hazardous substances have been or are threatened to be released and
which require investigation or cleanup.

The Superfund Amendments and Reauthorization Act of 1986 ("SARA") specifically provides that contractors deemed "response action contractors" with respect to any release or threatened release of a hazardous substance in connection with
a site on the NPL are not, subject to certain exceptions, liable under Superfund or any other federal law to any person for injuries, costs, damages, expenses or other liabilities which result from such release or threatened release. The Company may be a
response action contractor in respect to a portion of the work it performs. This protection only applies to releases or threatened releases on NPL sites. This protection does not apply in the case of a release that is caused by the negligence or
intentional misconduct of the response action contractor. Further this protection does not affect the liability of any person under any warranty under federal, state or common law, the liability of any person under state statutory or common law or the
liability of any employer who is a response action contractor to any employee under any provision of law. Certain states, including New York, have similar protections for response action contractors.

SARA also allows the government, under certain circumstances, to agree to indemnify and hold harmless a response action contractor against liability for negligence in carrying out a response action at an NPL site, unless such liability
was caused by the contractor's gross negligence or intentional misconduct. Any such indemnity will have deductibles and a limit to the amount of available indemnification.

Although the Company makes a continuing effort to avoid Superfund liabilities, the failure of the Company to conform its services to the requirements of Superfund could subject the Company to liabilities which could have a material
adverse effect on the Company's business.

Other.  The Company's services could be subject to other federal environmental protection laws, including, without limitation, The Clean Water Act, The Clean Air Act and the Toxic Substances Control Act. Many states
have adopted laws for the protection of the environment which may affect the Company, including laws governing the generation, handling, transportation and disposition of hazardous substances, and laws governing investigation and cleanup of, and liability
for, contaminated sites. Some of the state provisions are broader and more stringent than federal law and regulations. In addition, the Company is subject to the federal Occupational Safety and Health Act which imposes requirements for employee safety and
health. The failure of the Company to conform its services to the requirements of other applicable federal, state or common laws could subject the Company to liabilities which could have a material adverse effect on the Company's business. In addition,
the Company cannot predict the extent to which it may be affected by any law that may be enacted or enforced in the future, or by new interpretations of existing laws.

Employees

As of March 14, 2001, the Company had 236 full-time permanent employees of whom 13 were officers, 82 were project management, engineering and estimating personnel, 33 were scientists and technical personnel, 6 were in business
development and marketing, 32 were administrative personnel and 70 were field and shop personnel. In addition, the Company employs from 200 to 300 field workers on a temporary, as-needed basis. The Company's ability to retain and expand its staff of
qualified engineers, estimators, technicians and field personnel will be an important factor in the Company's future success. To date the Company has not experienced difficulty in attracting and retaining qualified personnel and does not expect difficulty
in the foreseeable future.

Work at the Company's various project sites is performed by regular Company personnel and by locally hired field workers. The Company sometimes enters into project agreements with local construction trades unions which provide field
workers for particular projects.

The Company considers its relations with its employees to be good.



|ITEM 2. | PROPERTIES
|------- | ----------

The Company and its subsidiaries currently operate out of six separate facilities. The Company believes that its current facilities are adequate for its present operations.

The following table summarizes the location and character of all significant property owned or leased by the Company as of February 28, 2001:

|Property                                                 | Location                        | Square
Footage | Lease Expiration 
|-------------------------------------------------------- | ------------------------------- | -------------- | -----------------
|Headquarter Office, shop and yard facilities             | Niagara Falls, NY               | 66,000         | Owned            
|Office                                                   | Pittsburgh
(Delmont, PA)        | 3,000          | Owned            
|Office                                                   | Philadelphia 
(Chadds Ford, PA) | 4,600          | Month-to-Month   
|Office and shop                                          | Chicago
(Merrillvile, IN)       | 8,000          | November 30,2004 
|Office                                                   | Long Beach, CA                  | 2,000          | December 31, 2001
|Office, laboratory and shop
Waste Stream Technology Inc. | Buffalo, NY                     | 52,000         | Owned            



|ITEM 3. | LEGAL PROCEEDINGS
|------- | -----------------

No material legal proceedings to which the Company is a party are pending. The Company knows of no legal proceedings pending or judgments entered against any director or officer of the Company in his or her capacity as such.

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

Not applicable.



EXECUTIVE OFFICERS OF THE REGISTRANT

The executive officers of the Company and their respective ages and positions with the Company are as follows:

|Name                 | Age | Title                                                   
|-------------------- | --- | --------------------------------------------------------
|Michael A. Elia      | 49  | President, Chief Executive Officer, Director            
|Laurence A. Elia     | 50  | Vice President and Director                             
|Richard A. Elia      | 47  | Executive Vice President and Director                   
|William J. McDermott | 51  | Vice President-Finance, Secretary and Director          
|Dena M. Armstrong    | 43  | Treasurer, Assistant Vice President-Finance and Director



Michael A. Elia has served as Chief Executive Officer of the Company since 1984. From 1982 to 1984 he served as Vice President in charge of all civil, heavy and highway construction operations of the Company and from 1979 to 1982 he
was a project manager with the Company. He received his B.S. degree in Civil Engineering from Villanova University.

Laurence A. Elia has served as a Vice President of the Company since 1975 and in various executive capacities prior to that time. He received his A.B. and B.S. degrees in Engineering from Dartmouth College.

Richard A. Elia has served as a Vice President of the Company since 1982 and in various executive capacities prior to that time. From 1979 to 1982 he served as project manager for many major projects. He received his B.S. degree in
Business Administration from Villanova University.

William J. McDermott has served as Vice President-Finance of the Company since 1986. From 1975 to 1986 he served as legal counsel and in various executive capacities with the Company. He received his J.D. and B.S. (Civil Engineering)
degrees from the State University of New York at Buffalo. He is a member of the New York Bar.

Dena M. Armstrong joined the Company in 1975. She served in various project and headquarters administrative positions form 1975 to 1982. Since 1982 she has served as Assistant Vice President-Finance. She received her B.S. degree from
Niagara University.

Michael, Laurence and Richard Elia are brothers; Dena M. Armstrong is their cousin.



PART II

|ITEM 5. | MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER 
MATTERS
|------- | -----------------------------------------------------------------------

(a)     Market Information. Trading in the Company's Common Stock is reported on the NASDAQ National Market tier of the NASDAQ Stock Market under the symbol "SEVN". There is no market
for the Company's Class B Common Stock.



The following table sets forth the high and low price of the Company's Common Stock as reported by the NASDAQ Stock Market for the periods indicated:



|YEAR         | QUARTER     | HIGH    | LOW    
|------------ | ----------- | ------- | -------
|2
0
0
0      | 4th Quarter | 12.875  | 10.500 
|3rd Quarter* | 12.750      | 10.170 
|2nd Quarter  | 10.682      | 8.750  
|1st Quarter  | 10.000      | 8.239  
|1
9
9
9      | 4th Quarter | 10 7/8  | 8 13/16
|3rd Quarter  | 11 5/8      | 8 3/4  
|2nd Quarter  | 11 5/8      | 7 1/2  
|1st Quarter  | 8           | 9 1/2  
|1
9
9
8      | 4th Quarter | 9       | 7 3/8  
|3rd Quarter  | 9           | 7 11/16
|2nd Quarter  | 10 1/8      | 8 3/8  
|1st Quarter  | 12 1/2      | 8 1/2  



*The company paid a 10% stock dividend on August 29, 2000. Low for the quarter occurred on July 5th. High occurred on September 5th and 7th.



(b)     Approximate Number of Holders of Each Class of Common Stock. As of March 14, 2001, 2,520,914 shares of the Company's Common Stock were outstanding and the number of holders of record of that
class on that date was 54. Because a substantial number of the Company's Common shares are held in street name, the Company believes that the number of beneficial owners of its Common Stock exceeds 400. As of the same date, there were 7,968,931 shares of
the Company's Class B Common Stock outstanding which were held by five stockholders (and their spouses) or in trust for their minor children.

(c)     Dividends. Since the third quarter of 1994 the Company has paid a regular quarterly dividend. For the fourth quarter of 2000, the dividend rate paid was 3.5¢ per share of Common
Stock and 3.18¢ per share of Class B Common Stock.



|ITEM 6. | SELECTED FINANCIAL DATA
|------- | -----------------------

The information included under the caption "Five Year Selected Financial Data" on page 5 of the Sevenson Environmental Services, Inc. 2000 Annual Report to Stockholders is incorporated herein by reference.



|ITEM 7. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL DATA AND 
RESULTS OF OPERATIONS
|------- | ---------------------------------------------------------------------------------

"Management's Discussion and Analysis" on pages 6 through 8 of the Sevenson Environmental Services, Inc. 2000 Annual Report to Stockholders is incorporated herein by reference.



|ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|------- | -------------------------------------------

The Consolidated Balance Sheets of the Company and its subsidiaries at December 31, 2000 and 1999, and the related Consolidated Statements of Earnings, Stockholders' Equity and Cash Flows for each of the three years in the
period ended December 31, 2000, together with the report thereon of Deloitte & Touche LLP dated February 14, 2001, are contained on pages 9 through 23 of the Sevenson Environmental Services, Inc. 2000 Annual Report to Stockholders and are incorporated
herein by reference. Supplementary quarterly financial information contained on page 23 under "Quarterly Results" is incorporated herein by reference.

With the exception of the aforementioned information and the information incorporated by reference in Items 6 and 7, the Annual Report to Stockholders is not to be deemed filed as part of this Form 10-K Annual Report.



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

Not applicable.







PART III

|ITEM 10. | DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
|-------- | --------------------------------------------------

The information regarding Directors is contained under the caption "Election of Directors" in the Company's definitive Proxy Statement involving the election of directors at its 2001 Annual Meeting of Stockholders which
the Company will file with the Securities and Exchange Commission pursuant to Schedule 14A under the Securities Exchange Act of 1934, as amended, not later than 120 days after December 31, 2000 and is incorporated herein by reference. Information related
to Executive Officers of the Company appears on page 10 of this Annual Report on Form 10-K. The information included under "Compliance with Section 16(a) of the Securities Exchange Act of 1934" in the Company's definitive Proxy Statement related to its
2001 Annual Meeting of Stockholders is incorporated herein by reference.



|ITEM 11. | EXECUTIVE COMPENSATION
|-------- | ----------------------

This information is contained under the captions "Executive Compensation" and "Compensation Committee Interlocks and Insider Participation" in the Company's definitive Proxy Statement related to its 2001 Annual Meeting of
Stockholders and is incorporated herein by reference.



|ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
|-------- | --------------------------------------------------------------

This information is contained under the caption "Security Ownership of Management and Principal Stockholders" in the Company's definitive Proxy Statement related to its 2001 Annual Meeting of Stockholders and is
incorporated herein by reference.



|ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
|-------- | ----------------------------------------------

This information is contained under the caption "Certain Transactions" in the Company's definitive Proxy Statement related to its 2001 Annual Meeting of Stockholders and is incorporated herein by reference.





PART IV

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



|(a) | The following documents are filed as part of this report:
|--- | ---------------------------------------------------------





|1. | The financial statements and report of independent public accounts set forth on pages 9 through 23 of the Sevenson Environmental Services, Inc. 2000 Annual Report to Stockholders are incorporated by reference into this
Annual Report on 10-K.                                                                                                                                                                              
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                
|2. | Financial statement schedule.                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The following financial statement schedules should be read in conjunction with the financial statements incorporated by reference in Item 8 of this Form 10-K Annual Report:                                                                                                                                                                                                                                                   
|   | Page
Independent Auditor's Report on Schedule...................................             18
Valuation and Qualifying Accounts...............................................             19                                                                                                                                                                                                                                
|   | Schedules other than those listed above are omitted because of the absence of the conditions under which they are required or because the information called for is included in financial statements or notes thereto.                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                
|3. | Exhibits - See the Exhibit Index on page 15 of this Annual Report on Form 10-K.                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The Company will provide a copy of any exhibit upon receipt of a written request for the particular exhibit or exhibits desired and upon receipt of payment of an amount equal to a charge of twenty-five cents for each
exhibit page, with a minimum charge of two dollars per request. All requests should be addressed to the Vice President and Secretary of the Company at the address of the Company's principal offices.



|(b) | Report on Form 8-K. No reports on Form 8-K were filed by the Company during the last quarter of its fiscal year ended December 31, 2000.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------



|(c) | Exhibits Filed. See Item 14(a)(3) above.
|--- | ----------------------------------------



|(d) | Financial Statement Schedules. See Item 14(a)(2).
|--- | -------------------------------------------------



SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this annual report to be signed on its behalf by the undersigned, thereunto duly authorized, on the 14th day of March, 2001.

| | SEVENSON ENVIRONMENTAL SERVICES, INC./s/     William J. McDermott                                William J. McDermott
Vice President and Chief Financial Officer
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------





Pursuant to the requirements of the Securities Exchange Act of 1934, this annual report has been signed on the 14th day of March, 2001 by the following persons in the capacities indicated:



|/s/ Michael A. EliaMichael A. Elia, Director and President
(Chief Executive Officer)                          | /s/ Arthur A. EliaArthur A. Elia, Director                                              
|------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------
|                                                                                                              |                                                                                         
|/s/ Richard A. EliaRichard A. Elia, Director and Executive
Vice President                                     | /s/ Laurence A. EliaLaurence A. Elia, Director and
Vice President                       
|                                                                                                              |                                                                                         
|/s/ William J. McDermottWilliam J. McDermott, Director
Vice President and Secretary
(Chief Financial Officer) | /s/ Dena M. ArmstrongDena M. Armstrong, Director, Treasurer
and Assistant Vice President
|                                                                                                              |                                                                                         
|/s/ Joseph J. CastigliaJoseph J. Castiglia, Director                                                          | /s/ Robert S. KelsoRobert S. Kelso, Director                                            





Deloitte & Touche







INDEPENDENT AUDITORS' REPORT ON SCHEDULETo the Board of Directors and Stockholders of
Sevenson Environmental Services, Inc.
Niagara Falls, New YorkWe have audited the consolidated financial statements of Sevenson Environmental Services, Inc. and Subsidiaries (the "Company") as of December 31, 2000 and 1999, and for each of the three years in the period ended December 31, 2000, and
have issued our report thereon dated February 14, 2001; such consolidated financial statements and report are included in your 2000 Annual Report to Stockholders and are incorporated herein by reference. Our audits also included the financial
statement schedule of Sevenson Environmental Services, Inc. and subsidiaries, listed in Item 14. This consolidated financial statement schedule is the responsibility of the Company's management. Our responsibility is to express an opinion based on
our audits. In our opinion, such consolidated financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly in all material respects the information set forth therein.



Deloitte & Touche LLP

Buffalo, New York
February 14, 2001







SEVENSON ENVIRONMENTALSERVICES, INC.                                   
                                  SCHEDULE IIVALUATION AND QUALIFYING ACCOUNTS

|COLUMN A
Description               | COLUMN B                     | COLUMN CAdditions            | COLUMN D                  | COLUMN E  
|---------------------------------- | ---------------------------- | ---------------------------- | ------------------------- | ----------
|                                   | Balance at
Beginning
of Year | Charged to
Cost and
Expenses | Charged to
Other
Accounts | Deductions
|Allowance for doubtful
  accounts: |                              |                              |                           |           
|1998                               | $ 40,575                     | $ 0                          | $ 0                       | $ 0       
|1999                               | 40,575                       | $ 0                          | $ 0                       | $ 0       
|2000                               | 40,575                       | $ 0                          | $ 0                       | $ 0       











EXHIBIT INDEX

Exhibit No.

|3.1*      | Certificate of Incorporation                                                                                                                                                                                                                                                                                           
|--------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.2**     | By-Laws                                                                                                                                                                                                                                                                                                                
|9***      | Voting Agreement dated April 3, 1989 among Michael A. Elia, Laurence A. Elia, Richard A. Elia, Alan Elia, Jr., and William J. McDermott.                                                                                                                                                                               
|10.2****  | Agreement dated October 30,1981 between the Company and the Arthur A. Elia Trust, as amended and promissory note in the principal amounts of $1,000.000.                                                                                                                                                               
|10.3****  | Agreement dated October 30, 1981 between the Company and the Alan R. Elia Trust, as amended, and promissory note in the principal amount of $1,000,000.                                                                                                                                                                
|10.5***   | Stockholders Agreement dated April 3, 1989 among the Company, Michael A. Elia, Laurence A. Elia, Richard A. Elia, Alan Elia, Jr., and William J. McDermott.                                                                                                                                                            
|10.6***** | Agreement dated as of January 1, 1997 between the Company and SCC Contracting, Inc.                                                                                                                                                                                                                                    
|10.7***** | Agreement dated as of January 1, 1997 between the Company and Sevenson Hotel Associates, Inc.                                                                                                                                                                                                                          
|10.8***   | Tax Indemnity Agreement dated April 1, 1989 among the Company, Sevenson Environmental Ltd., SCC Contracting, Inc., Michael A. Elia, Laurence A. Elia, Richard A. Elia, Alan Elia, Jr., and William J. McDermott.                                                                                                       
|10.9****  | Indemnity Agreement dated April 17, 1989 among the Company, Sevenson Environmental Ltd., SCC Contracting, Inc., Albert Elia Building Company, Inc., Afore, Inc., Michael A. Elia, Laurence A. Elia, Richard A. Elia, Alan Elia, Jr., and
William J. McDermott.                                                         
|10.10**** | Split Dollar Insurance Agreement, dated March 1, 1984 between the Company and Michael A. Elia.                                                                                                                                                                                                                         
|10.11**** | Split Dollar Insurance Agreement, dated March 1, 1984 between the Company and Laurence A. Elia.                                                                                                                                                                                                                        
|10.12**** | Split Dollar Insurance Agreement, dated March 1, 1984, between the Company and Richard A. Elia.                                                                                                                                                                                                                        
|10.13**** | Split Dollar Insurance Agreement, dated March 1, 1984, between the Company and William J. McDermott.                                                                                                                                                                                                                   
|10.14**** | Sevenson Environmental Services, Inc. Pension Plan.                                                                                                                                                                                                                                                                    
|10.15**** | Sevenson Environmental Services, Inc. Profit Sharing Plan.                                                                                                                                                                                                                                                             
|10.16**** | 1989 Sevenson Environmental Services, Inc. Incentive Stock Plan.                                                                                                                                                                                                                                                       
|10.17***  | Option Agreement dated April 17, 1989 between the Company and Alan R. Elia, Sr.                                                                                                                                                                                                                                        
|13        | Sevenson Environmental Services, Inc.'s 2000 Annual Report to Stockholders (such report, except for those portions thereof which are expressly incorporated by reference in this Form 10-K Annual Report, is furnished for the information of
the Commission and is not to be deemed "filed" as part of the Form 10-K).
|21        | Subsidiaries of the Registrant.                                                                                                                                                                                                                                                                                        
|23        | Consent of Independent Auditors                                                                                                                                                                                                                                                                                        



*       Incorporated by reference to Exhibit 3(a) of the Company's amended report on Form 10-Q/A for the quarter ended June 30, 1998.

**     Incorporated by reference to Exhibit 3(b) of the Company's amended report on Form 10-Q/A for the quarter ended June 30, 1998.

***    Incorporated by reference to the same exhibit numbers in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1990 (File No. 0-17536).

****  Incorporated by reference to the same exhibit numbers in the Company's registration statement on Form S-1 (File No. 0-17536).

*****  Incorporated by reference to the same exhibit numbers in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1999 (File No. 0-17536).









EXHIBIT 13
Sevenson Environmental Services, Inc. 2000 Annual Report

Contents

|                                                                                                                                                                                                                                                                                                        | Page                                   
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------
|Annual Message to Stockholders
Financial Review
Consolidated Statements of Earnings
Consolidated Balance Sheets
Consolidated Statements of Cash Flows
Consolidated Statements of Stockholders'
Notes to Consolidated Financial Statements
Independent Auditors' Report
Management
Corporate Information | 2-4
5-8
9
10-11
12-13
14
15-23
23
24
24



Corporate Profile

Sevenson provides a comprehensive range of services for the remediation of sites and facilities contaminated by hazardous materials. Founded as a general construction business in 1917, Sevenson entered the remediation business in 1979 when it
became the principal contractor for the remediation of the Love Canal site, Niagara Falls, New York. Sevenson has performed over 864 projects with a combined value of over $1.1 billion, including projects at 86 Superfund sites.

Headquartered in Niagara Falls, New York, the Company and its subsidiaries also maintain offices in Pittsburgh, Philadelphia, Buffalo, Chicago and Los Angeles. Present full-time employees number 236.

Sevenson's common stock trades on the National Market tier of The Nasdaq Stock Market



Notice of Annual Meeting

The Annual Meeting of the Stockholders of Sevenson Environmental Services, Inc., will be held on Tuesday, May 22, 2001 at 10:00 a.m. EDT at the Comfort Inn, One Prospect Point, Niagara Falls, New York 14303.



Forward-Looking Statements

Certain statements and information included herein constitute "forward-looking statements" within the meaning of the Federal Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified as such
because the context of the statement will include words such as the Company "believes", "expects", "anticipates", "hopes", or words of similar import. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which
may cause the actual results, performance, or achievements of the Company to be materially different from any future results, performance, or achievements expressed or implied in such forward-looking statements. You are urged to review the Company's
Annual Report on Form 10-K for the year ended December 31, 2000, as well as all reports filed by the Company subsequent to the Form 10-K with the Securities and Exchange Commission under the Securities Exchange Act of 1934.



Financial HighlightsSevenson Environmental Services, Inc. and Subsidiaries

|For the years ended December 31(In thousands except per share data) | 2000        | 1999        | 1998       
|------------------------------------------------------------------- | ----------- | ----------- | -----------
|                                                                    |             |             |            
|INCOME STATEMENT                                                    |             |             |            
|Revenue                                                             | $126,499    | $127,173    | $ 84,700   
|Net Earnings                                                        | $  12,105   | $    9,737  | $   6,545  
|Earnings Per Share                                                  | $      1.15 | $      0.93 | $     0.60 
|                                                                    |             |             |            
|Dividends Paid Per Share:                                           |             |             |            
|Common                                                              | $     0.14  | $     0.14  | $    0.14  
|Class B Common                                                      | $    0. 13  | $     0.13  | $    0.13  
|Weighted Average Common Shares Outstanding                          | 10,490      | 10,493      | 10,940     
|                                                                    |             |             |            
|BALANCE SHEET- December 31                                          |             |             |            
|Cash, Cash Equivalents and Marketable Securities                    | $  60,017   | $  51,925   | $  59,924  
|Working Capital                                                     | $  76,868   | $  64,716   | $  62,106  
|Total Assets                                                        | $129,799    | $127,327    | $103,464   
|Long-Term Debt                                                      | $    2,459  | $    2,592  | $    2,245 
|Stockholders' Equity                                                | $103,645    | $  93,278   | $  85,115  
|Common Shares Outstanding                                           | 10,490      | 10,490      | 10,500     
|Common Share Book Value                                             | $      9.88 | $      8.89 | $      8.11



To Our Stockholders:

The favorable conditions and trends which I described in last year's letter stayed with us throughout 2000. These allowed us to nearly duplicate 1999's record revenues and to produce record earnings. 2000 revenues were $126.5 million, just half a
percent below 1999's record $127.2 million revenues. Net earnings were a record $12.1 million, or $1.15 per share, an increase of 24% over 1999's earnings of $9.7 million, or $0.93 per share.

The conditions and trends which I described in last year's letter and which have been largely responsible for our outstanding results the last two years are:

Federal government cleanup spending.
Despite mid-'90s concerns about the Superfund program and the absence of growth in the Superfund's budget, the Company benefitted from federal spending policies which devoted more Superfund dollars to actual cleanup work - which is what we do - as
opposed to investigations, studies, overhead and other non-cleanup activities B things we do not do. In 2000 our work on federally-funded projects actually increased 20% even while our overall revenues were flat. We expect the new administration to
continue existing spending policies.

Private sector cleanup spending.
The majority of our revenues come from private sector customers. This was true throughout the '90s and in 2000 as well. Almost three-fifths of 2000 revenues were from private sector customers.

Private sector revenue actually increased over 7% again in a year when overall revenues were flat. Private cleanup spending is driven by government enforcement of environmental laws and, to a lesser extent, by general economic conditions. Both of
these factors acted beneficially over the last few years.

With a new administration and a slowing economy, how these factors will affect our business in 2001 and beyond is not yet clear.

Industry Consolidation.
In the '90s our industry matured and consolidated. Many of our principal competitors of the early '90s disappeared through mergers, acquisitions and departures. Consequently, competition eased and the nature of competition changed. Customers who in the
past awarded contracts on a competitive bid basis modified their approach to include negotiation, strategic alliances and partnering. In 2000 we formalized partnering agreements with two Fortune 500 companies for remediation services at sites throughout
the U.S. over the next 10 years. Of course, an easing or changing competitive environment will inevitably attract new competitors and we have begun to see this. In 2001 we expect the competitive situation to firm, but to continue to be moderate.

Dredging, dewatering and water treatment.
Since the mid-'90s the Company has built a capability and reputation for performing large-scale cleanups of contaminated sediments in waterways, lakes, ponds and industrial waste lagoons. These projects involve dredging, dewatering of sediments, and the
treatment of contaminated water. They require specialized equipment and know-how which we possess. In 2000 over 15% of our revenues was from such projects. Throughout the country there are contaminated sediments in water which will require cleanup over
the coming years. We are well positioned to compete for this work.

Brownfields.
Brownfields cleanup and redevelopment has been a theme of policy makers since the mid-'90s. Our company became involved then and had some early success. Over the last few years, it has become apparent to us that Brownfields redevelopment presents greater
challenges than can be efficiently addressed under current regulatory, legal and business conditions. Until changes occur, we are not actively seeking new Brownfields projects.

Contract Backlog.
During 2000 we booked $108 million in new contracts and additions to existing contracts, a good showing but lower than the records of $149 million and $116 million set in 1999 and 1998 respectively. Consequently, our contract backlog at the end of 2000
was lower at $94 million versus $113 million a year earlier. The outlook for new bookings in 2001 appears to be positive. In January we added a $13 million Superfund project to backlog which is a good start.

Thanks are again in order to our entire staff for another great year. Special recognition and thanks are deserved by our project management and key operational people who spend most of the year away from home at projects which are often running
extended hours 6 and even 7 days a week.

And thanks again to our stockholders for your support and confidence.

Cordially, 
Michael A. Elia, President
February 14, 2001







Five-Year Selected Financial Data (In thousands, except per share amounts)

|                                              | Years Ended December 31,
|--------------------------------------------- | ------------------------
|                                              | 2000                    
|INCOME STATEMENT DATA:                        |                         
|Revenue                                       | $126,499                
|Earnings from Operations                      | 16,306                  
|                                              |                         
|Net Earnings                                  | 12,105                  
|                                              |                         
|Basic and Diluted Earnings Per Share          | $    1.15               
|                                              |                         
|BALANCE SHEET DATA:
DECEMBER 31               |                         
|Working Capital                               | $ 76,868                
|Total Assets                                  | 129,799                 
|Long-Term Debt (including current maturities) | 2,459                   
|Stockholders' Equity                          | 103,645                 

Applicable per share amounts have been restated for the Company's 2000 stock dividend and 1997 stock split.



Management's Discussion and Analysis of Financial Condition and Results of Operations
RESULTS OF OPERATIONS
The following table sets forth certain items of selected consolidated financial information as a percentage of revenues for the periods indicated. This table and the subsequent discussion should be read in conjunction with the selected financial
information and the Consolidated Financial Statements and Notes to Consolidated Financial Statements of the Company included elsewhere in this Annual Report.



|                                           | Years Ended December 31,
|------------------------------------------ | ------------------------
|                                           | 2000                    
|                                           |                         
|Revenue                                    | 100.0%                  
|Gross Margin                               | 22.2                    
|Selling, General & Administrative Expenses | 9.3                     
|Earnings from Operations                   | 12.9                    
|Earnings Before Income Taxes               | 15.3                    
|Net Earnings                               | 9.6                     



2000 versus 1999 
2000 revenues were $126.5 million, 0.5% lower than record 1999 revenues of $127.2 million. The near record and record revenues of 2000 and 1999 resulted from record contract backlog at the beginning of both years. The two principal factors which led to
record backlogs were (1) the increased number and size of contract opportunities in 1999 and 1998 and (2) competitors who were fewer and less aggressive than in prior years. These factors continued to be present throughout most of 2000 and contributed to
backlog at year's end of $93.7 million which, although lower than the record backlog of a year earlier ($112.6 million), was high by historical standards (see 1999 versus 1998 below).

Earnings from operations were a record $16.3 million, 24% higher than the $13.1 million for 1999. Operating earnings were higher due to higher gross margin offset in part by higher selling, general and administrative (SG&A) expense. Gross margin
was 22.2% compared to 18.8% in 1999.

Gross margin reflects the profit margins of projects active during the year. The profit margin for a particular project is the product of a number of factors including the nature of the project, competition and the impact of operational conditions on
project execution. In 2000 gross margin was higher due to the positive effect of all these factors. Projects underway included a number of technically and operationally challenging projects which carry a higher margin. Also contributing to higher margins
were favorable project site conditions, cost controls, and the favorable resolution of contract issues and cost contingencies on several projects.

Over the five years 1996 through 2000, the Company's gross margin ranged from a high of 22.2% (2000) to a low of 16.8% (1997). The Company believes that this range more or less defines a normal range for the Company's operations and expects that its
gross margin will continue to fall within or near this range for the foreseeable future. For 2001 the Company is not expecting gross margin to be at the top of the range as in 2000.

SG&A expense was $11.8 million, up 9% from $10.8 million in 1999. Employee benefits, legal and accounting, and travel expense were the principal contributors to the increase. Increases in these and other areas were offset by savings from cessation
of casino gaming initiatives and closing a branch office.

Interest income was $2,888,000, up 17% from the prior year's $2,468,000. Interest income increased due to higher interest rates and higher invested balances. The Company realized a net gain on sale of marketable securities of $481,000, up from
$240,000 in 1999.

The Company recognized a net loss of $1,418,000, down from $1,483,000 in 1999, on its investment in Powerize.com, Inc., an internet-based information service provider. During the third quarter Powerize.com merged with Hoover's, Inc. (Nasdaq: HOOV);
the Company recognized again of $300,000 on its sale of its investment in Powerize.com.

A Company-owned Brownfield site produced net rental income of $944,000 compared to $780,000 the same site produced in 1999.

The effective tax rate used in the provision for income taxes is 37.3% as compared to 36.5% in 1999. The higher rate was due to higher earnings from operations as a percentage of pre-tax earnings versus interest income. Interest income includes tax
exempt and dividend income which have a lower effective tax rate.

For the year 2000, the Company had revenues of $33 million from federal government contracts which were awarded based on competition restricted to "small business" firms. To qualify as a "small business" a firm must have averaged fewer than 500
employees over the latest 12 month period. For the 12 months ended December 31, the Company's average was just over 471 employees. At the Company's current level of activity, the Company expects its "small business" status to continue.

In 2001, the Company plans to adopt Statement of Financial Accounting Standards No. 133, "Accounting for Derivatives Instruments and Hedging Activities." This standard will require the Company to recognize all derivative financial instruments on its
balance sheet at fair value with changes in fair value recorded to the statement of operations or comprehensive income, depending on the nature of the investment. The Company has concluded the adoption of the standard will not have a material effect on
the Company's financial statements.



1999 Versus 1998 -- 1999 revenues were a record $127.2 million compared to $84.7 million in 1998, a 50% increase. The previous record for annual revenues was $102.5 million in 1995. 1999's record revenues were a direct result of record backlog
at the beginning of the year, $91.1 million (compared to $60.6 million at the beginning of 1998 and the previous record of $65.0 million at the beginning of 1997), and the receipt during the first quarter of a record (for the first quarter) $51.9 million
in additional backlog. At the end of the first quarter the Company had a record backlog of $124.9 million compared to $62.0 million a year earlier and the previous record for that date of $77.0 million in 1994. One contract, a $23 million contract from
the State of New York for work at the Cumberland Bay site near Plattsburgh, New York, accounted for a significant portion of the new backlog.

The Company's success acquiring backlog continued throughout the year. The Company ended the year with record backlog of $112.5 million compared to the previous record of $91.1 million a year earlier. The chief factors which contributed to this
success were the increased number and size of contract opportunities available and the Company's higher win rate due in part to less aggressive bidding by competitors.

Earnings from operations increased 91% to $13.1 million from $6.9 million in 1998. The increase was due to higher revenues, offset in part by higher selling, general and administrative (SG&A) expense and lower gross margin (18.8% versus 19.6%).

1999's gross margin was increased by the reversal of a $1 million patent infringement verdict entered against the Company in 1997. Without that increase, gross margin would have been 18.0%.

SG&A expense was $10,802,000, up 11% from $9,729,000 in 1998. Most of the increase was attributable to business development efforts including casino gaming initiatives, a new branch location for the Company's industrial services subsidiary, and
general marketing. Expenses associated with the Company's installation of a new accounting software system also contributed to the increase in SG&A expense.

Interest income was $2,468,000 as compared to $2,377,000 in 1998. The increase was due to higher interest rates generally and to a higher proportion of taxable interest-bearing investments which bear a higher rate of interest than tax exempt
investments. Realized gain on marketable securities was $240,000, down from $852,000 in 1998. Rising interest rates reduced the value of some longer term interest bearing investments. The Company recognized a net loss of $1,483,000 on an investment in
Powerize.com, Inc., an emerging internet-based information service provider. The Company realized net rental income of $780,000 from a Brownfields property which the Company owns and is remediating.

The effective tax rate was 36.5% as compared to 33.8% in 1998. The higher rate was due to higher earnings from operations as a percentage of pre-tax earnings versus interest income. Interest income includes tax exempt and dividend income which have a
lower effective tax rate.

Fluctuations in Quarterly Results -- The commencement or completion of projects within a particular quarter, the seasonal nature of the Company's business, the spending decisions of customers, and the timing of regulatory decisions relating to
projects, among other factors, may cause the Company's results to vary significantly quarter to quarter and from year to year. The Company believes that these variations will continue in the future. The following selected financial data have been derived
from unaudited interim financial statements which, in the opinion of the Company, include all adjustments (consisting of normal recurring accruals)necessary to fairly present the information for such periods. Quarterly results of operations are not
necessarily indicative of results to be achieved for full fiscal years



|2000 Quarter | Revenue        | Net Earnings
|------------ | -------------- | ------------
|             | (In thousands)
|1st          | $21,080        | $    991    
|2nd          | 29,956         | 3,423       
|3rd          | 39,033         | 5,128       
|4th          | 36,430         | 2,553       



|1999 Quarter | Revenue        | Net Earnings
|------------ | -------------- | ------------
|             | (In thousands)
|1st          | $18,108        | $    796    
|2nd          | 27,698         | 2,620       
|3rd          | 42,909         | 3,193       
|4th          | 38,477         | 3,128       



Liquidity and Capital Resources
Net cash provided by operating activities was $10.5 million compared to $1.9 million in 1999. Cash receipts from customers were $126.1 million, or about 100% of revenue, as compared to $109.6 million, or about 86% of revenues, in 1999. This difference
largely accounted for the substantial increase in net cash provided by operating activities in 2000 over 1999. Higher cash receipts in 2000 over 1999 can be attributed to several factors, but the most significant was higher revenues in 1999 over 1998.
Higher revenues in the preceding year result in higher cash receipts the following year as receivables from the preceding year are collected.

Net cash used in investing activities was $963,000, down from $1,480,000 in 1999. In 1999 the Company sold investments to provide funds for investment in subsidiary and capital expenditures. In 2000, the purchase and sale of investments were
substantially balanced as were investment in subsidiary and capital expenditures. Capital expenditures were lower in 2000, $3,539,000 versus a record $7,245,000 in 1999. Capital expenditure decisions are made based on the equipment needs of current
projects, the availability of needed equipment (either from the Company's fleet or by rental), and the anticipated future usefulness of equipment if purchased.

The Company paid a regular quarterly dividend of 3.5 cents per share of Common Stock and 3.18 cents per share of Class B Common Stock. Total dividends paid were $1.3 million. The Company also paid a 10% stock dividend on August 29, 2000.

The Board of Directors has authorized the repurchase of up to 1,200,000 shares of which 1,111,451 had been repurchased through December 31, 1999. The Company cancelled its 1,111,451 treasury shares on August 8, 2000. No shares were repurchased during
2000.

In 1995 the Board of Directors authorized the Company to pursue the business strategy of acquiring, cleaning up and disposing of "Brownfield" sites, real property that is unmarketable or of substantially reduced value due to the presence of
contamination. In 1996 the Company acquired interests in, and commenced the cleanup process at, two Brownfield sites. In 1997 the cleanup and sale of one of these sites were completed and the Company acquired interests in one additional site. Since 1997
no new sites have been purchased. In 1998, the Company purchased the interest of another party in one of the sites. During 1999, the Company sold a parcel of non-Brownfield property which had been acquired as part of the acquisition of an adjacent
Brownfield site; the Company retains the Brownfield site itself. At the end of 2000, the Company's investment in Brownfield sites was $9.7 million. The Company will invest further funds in the cleanup of one of the remaining sites (cleanup at the other
sites is substantially complete). The Company is not actively seeking new Brownfield ventures.

During 1999 the company invested $5.2 million in Powerize.com, Inc., a closely-held, emerging internet information services provider. In 2000 Powerize.com was acquired by Hoover's, Inc. (Nasdaq: HOOV).

On December 31, 2000, the Company had working capital of $76.9 million versus $64.7 million a year earlier. Working capital included $60.0 million in cash, cash equivalents and marketable securities. The Company expects that existing funds and cash
generated by operations will be sufficient to meet all working capital and capital investment needs for the foreseeable future.

Consolidated Statements of Earnings
Sevenson Environmental Services, Inc. and Subsidiaries

|(in thousands, except share data)                  | Years ended December 31,
|-------------------------------------------------- | ------------------------
|                                                   | 2000                    
|                                                   |                         
|REVENUE (Note 10)                                  | $  126,499              
|                                                   |                         
|COSTS AND EXPENSES:                                |                         
|Direct and indirect costs                          | 98,376                  
|Selling, general and administrative (Note 1)       | 11,817                  
|                                                   | 110,193                 
|EARNINGS FROM OPERATIONS                           | 16,306                  
|                                                   |                         
|OTHER:                                             |                         
|Interest income                                    | 2,888                   
|Interest expense                                   | (186)                   
|Realized net gain on sale of marketable securities | 481                     
|Equity in net loss of subsidiary                   | (1,418)                 
|Gain on sale of investment                         | 300                     
|Other income                                       | 944                     
|                                                   | 3,099                   
|EARNINGS BEFORE INCOME TAXES                       | 19,315                  
|                                                   |                         
|INCOME TAXES (Notes 1 and 7)                       | 7,210                   
|                                                   |                         
|NET EARNINGS                                       | $  12,105               
|                                                   |                         
|BASIC AND DILUTED EARNINGS PER SHARE (Note 1)      | $     1.15              
|                                                   |                         
|WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING      | 10,489,845              
|                                                   |                         
|CASH DIVIDENDS PER SHARE:                          |                         
|Common Stock                                       | $      0.14             
|Common B Common Stock                              | $      0.13             



Note:  The weighted average number of shares outstanding and basic and diluted earnings per share information for all prior reporting periods have been restated to reflect the effects of the 10% stock dividend which was paid on August 29, 2000
 .



See notes to consolidated financial statements.









Consolidated Balance SheetsSevenson Environmental Services, Inc. and Subsidiaries

|(In thousands, except share data)                                                                      | December 31,
|------------------------------------------------------------------------------------------------------ | ------------
|                                                                                                       |             
|                                                                                                       | 2000        
|Assets                                                                                                 |             
|                                                                                                       |             
|CURRENT ASSETS:                                                                                        |             
|Cash and cash equivalents (Note 1)                                                                     | $  19,146   
|Marketable securities (Note 2)                                                                         | 40,871      
|Accounts receivable, net (Note 3)                                                                      | 35,408      
|Note receivable                                                                                        | 1,250       
|Costs and estimated earnings on contracts in
    progress in excess of related billings Notes 1 and 4) | 893         
|Prepaid expenses and other current assets                                                              | 931         
|                                                                                                       |             
|Total current assets                                                                                   | 98,499      
|                                                                                                       |             
|                                                                                                       |             
|PROPERTY AND EQUIPMENT (Note 1)                                                                        |             
|Land                                                                                                   | 323         
|Buildings and improvements                                                                             | 3,549       
|Construction and field equipment                                                                       | 27,187      
|Vehicles                                                                                               | 6,143       
|Office furniture and equipment                                                                         | 2 ,174      
|                                                                                                       | 39,376      
|Less accumulated depreciation                                                                          | 22,192      
|Total property and equipment, net                                                                      | 17,184      
|                                                                                                       |             
|INVESTMENT IN BROWNFIELD REAL ESTATE (Note 1)                                                          | 9,717       
|                                                                                                       |             
|OTHER ASSETS (Note 1)                                                                                  | 4,399       
|                                                                                                       |             
|                                                                                                       |             
|TOTAL ASSETS                                                                                           | $129,799    

See notes to consolidated financial statements.













|                                                                                                                     | December 31,
|-------------------------------------------------------------------------------------------------------------------- | ------------
|                                                                                                                     | 2000        
|Liabilities and Stockholders' Equity                                                                                 |             
|                                                                                                                     |             
|CURRENT LIABILITIES:                                                                                                 |             
|Accounts payable:                                                                                                    |             
|Current                                                                                                              | $   9,245   
|Retentions                                                                                                           | 590         
|Notes payable -- current (Note 5)                                                                                    | 1,392       
|Compensation, income taxes and other current liabilities (Note 7)                                                    | 721         
|Deferred income taxes (Notes 1 and 7)                                                                                | 0           
|Amounts billed in excess of costs and estimated earnings 
    on contracts in progress (Note 1 and 4)                | 9,683       
|Total current liabilities                                                                                            | 21,631      
|                                                                                                                     |             
|DEFERRED INCOME TAXES (Notes 1 and 7)                                                                                | 2,064       
|                                                                                                                     |             
|NOTES PAYABLE (Note 5)                                                                                               | 2,459       
|                                                                                                                     |             
|COMMITMENTS AND CONTINGENCIES (Note 11)                                                                              |             
|                                                                                                                     |             
|STOCKHOLDERS' EQUITY (Note 1, 6 and 9):                                                                              |             
|Common Stock, $.01 par value:
    Authorized 12,000,000 shares, 
        Issued 2,520,914 and 3,253,470 shares       | 25          
|Class B Common Stock, $.01 par value:
    Authorized 8,000,000 shares,
        Issued 7,968,931 and 7,394,210 shares | 80          
|Preferred Stock, $.01 par value:
    Authorized 1,000,000 shares, 
        Outstanding - none                        | 0           
|Additional paid-in capital                                                                                           | 35,922      
|Retained earnings                                                                                                    | 67,268      
|                                                                                                                     | 103,295     
|Treasury stock (0 and 1,111,451 shares common stock, at cost)                                                        | 0           
|                                                                                                                     | 103,295     
|Accumulated other comprehensive income:
  Unrealized gain on marketable securities, net of tax (Note 2)              | 350         
|                                                                                                                     |             
|Total stockholders' equity                                                                                           | 103,645     
|                                                                                                                     |             
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                                           | $129,799    



See notes to consolidated financial statements.









Consolidated Statements of Cash FlowsSevenson Environmental Services, Inc.

|(In thousands)                                                                                 | Years ended December 31,
|---------------------------------------------------------------------------------------------- | ------------------------
|                                                                                               | 2000                    
|                                                                                               |                         
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                          |                         
|Cash receipts from customers                                                                   | $  126,077              
|Cash payments to subcontrators, suppliers and employees                                        | (109,338)               
|Interest received                                                                              | 2,888                   
|Interest paid                                                                                  | (186)                   
|Taxes paid                                                                                     | (8,986)                 
|Tax refunds received                                                                           | 8                       
|Net cash provided by operating activities                                                      | 10,463                  
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                          |                         
|Investments purchased                                                                          | (22,708)                
|Investments sold                                                                               | 22,803                  
|Investment in subsidiary                                                                       | 3,814                   
|Capital expenditures                                                                           | (3,539)                 
|Acquisition and remediation costs                                                              | (881)                   
|Change in notes receivable                                                                     | 0                       
|Proceeds from sale of fixed assets                                                             | 22                      
|Net rental income from Brownfields property                                                    | 944                     
|Equity in net loss of subsidiary                                                               | (1,418)                 
|Proceeds from the sale of real estate                                                          | 0                       
|Net cash used in investing activities                                                          | 963)                    
|                                                                                               |                         
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                          |                         
|Debt proceeds                                                                                  | 1,280                   
|Principal payments of debt                                                                     | (1,415)                 
|Acquisition of treasury stock                                                                  | 0                       
|Dividends paid                                                                                 | (1,272)                 
|Net cash used in financing activities                                                          | (1,407)                 
|                                                                                               |                         
|NET CHANGE IN CASH AND CASH EQUIVALENTS                                                        | 8,093                   
|                                                                                               |                         
|CASH AND CASH EQUIVALENTS, 
  BEGINNING OF YEAR                                                | 11,053                  
|CASH AND CASH EQUIVALENTS, END OF YEAR                                                         | $  19,146               
|RECONCILIATION OF NET EARNINGS TO NET CASH
  PROVIDED BY OPERATING ACTIVITES:                  |                         
|Net earnings                                                                                   | $  12,105               
|Adjustments to reconcile net earnings to net cash
  Provided by operating activities:          |                         
|Depreciation and amortization                                                                  | 3,617                   
|Increase in cash surrender value of life insurance                                             | (334)                   
|Provision for deferred income taxes                                                            | (259)                   
|Gain (loss) on sale of real estate                                                             | 0                       
|Gain on sale of marketable securities                                                          | (481)                   
|(Gain) loss on sale of fixed assets                                                            | (22)                    
|Change in assets and liabilities affecting cash flow:                                          |                         
|Accounts and notes receivable                                                                  | 2,814                   
|Costs and estimated earnings on contracts in progress 
          in excess of related billings | 152                     
|Prepaid expenses and other current assets                                                      | (55)                    
|Other assets                                                                                   | 166                     
|Accounts payable                                                                               | (2,728)                 
|Compensation, income taxes and other current liabilities                                       | (1,146)                 
|Amounts billed in excess of costs and estimated earnings
          on contracts in progress    | (3,366)                 
|NET CASH PROVIDED BY OPERATING ACTIVITIES                                                      | $  10,463               

See notes to consolidated financial statements.









Consolidated Statements of Stockholders' Equity (Note 6)
Sevenson Environmental Services, Inc. and Subsidiaries
Years ended December 31, 2000, 1999 and 1998 (In thousands, except share data)

|                                                                                           |           |             |                     |                           |                  |               |                                                 | Other
Comprehensive Income
|------------------------------------------------------------------------------------------ | --------- | ----------- | ------------------- | ------------------------- | ---------------- | ------------- | ----------------------------------------------- | --------------------------
|                                                                                           | Total     | CommonStock | Class B
CommonStock | Additional
Pain-inCapital | RetainedEarnings | TreasuryStock | Unrealized
Gain (Loss) 
on
MarketableSecurities | CumulativeTranslation     
|                                                                                           |           |             |                     |                           |                  |               |                                                 |                           
|Balance January 1, 1998                                                                    | $  84,373 | $   316     | $    748            | $  24,463                 | $  61,872        | $(3,723)      | $     792                                       | $  (95)                   
|                                                                                           |           |             |                     |                           |                  |               |                                                 |                           
|Purchase of 583,811 treasury 
  shares of common stock                                     | (4,764)   | 0           | 0                   | 0                         | 0                | (4,764)       | 0                                               | 0                         
|Conversion of 51,590 
  shares Class B common 
  stock  to common stock                    | 0         | 1           | (1)                 | 0                         | 0                | 0             | 0                                               | 0                         
|Conversion to $.01 par 
  value                                                            | 0         | (284)       | (673)               | 957                       | 0                | 0             | 0                                               | 0                         
|Cash dividends paid                                                                        | (1,321)   | 0           | 0                   | 0                         | (1,321)          | 0             | 0                                               | 0                         
|Liquidation of Canadian 
  subsidiary                                                      | 0         | 0           | 0                   | 0                         | (95)             | 0             | 0                                               | 95                        
|Comprehensive income:                                                                      |           |             |                     |                           |                  |               |                                                 |                           
|Change in unrealized gain 
    on marketable securities, 
    net tax of $138              | 282       | 0           | 0                   | 0                         | 0                | 0             | 282                                             | 0                         
|Net earnings                                                                               | 6,545     | 0           | 0                   | 0                         | 6,545            | 0             | 0                                               | 0                         
|Total comprehensive 
          income                                                      | 6,827     | 0           | 0                   | 0                         | 6,545            | 0             | 82                                              | 0                         
|Balance, December 31, 
  1998                                                              | $85,115   | $      33   | $      74           | $ 25,420                  | $ 67,001         | $(8,487)      | $    1,074                                      | $          0              
|                                                                                           |           |             |                     |                           |                  |               |                                                 |                           
|Purchase of 9,400 treasury 
  shares from common 
  stock                                  | (76)      | 0           | 0                   | 0                         | 0                | (76)          | 0                                               | 0                         
|Conversion of 40,640 
  shares of Class B 
  common stock to 
  common stock               | 0         | 0           | 0                   | 0                         | 0                | 0             | 0                                               | 0                         
|Cash dividends paid                                                                        | (1,239)   | 0           | 0                   | 0                         | (1,239)          | 0             | 0                                               | 0                         
|Comprehensive income:                                                                      |           |             |                     |                           |                  |               |                                                 |                           
|Change in unrealized gain 
    on marketable securities, 
    net of tax $(149)            | (259)     | 0           | 0                   | 0                         | 0                | 0             | (259)                                           | 0                         
|Net earnings                                                                               | 9,737     | 0           | 0                   | 0                         | 9,737            | 0             | 0                                               | 0                         
|Total comprehensive 
     income                                                           | 9,478     | 0           | 0                   | 0                         | 9,737            | 0             | (259)                                           | 0                         
|Balance, December 31,
  1999                                                               | $  93,278 | $      33   | $       74          | $ 25,420                  | $  75,499        | $ (8,563)     | $      815                                      | $         0               
|                                                                                           |           |             |                     |                           |                  |               |                                                 |                           
|Conversion of 152,200 
  shares of Class B 
  common stock to
  common stock               | 0         | 1           | (1)                 | 0                         | 0                | 0             | 0                                               | 0                         
|Cash dividends paid                                                                        | (1,272)   | 0           | 0                   | 0                         | (1,272)          | 0             | 0                                               | 0                         
|Stock dividend                                                                             | 0         | 2           | 8                   | 10,502                    | (10,512)         | 0             | 0                                               | 0                         
|Treasury stock
   retirement                                                               | 0         | (10)        | (1)                 | 0                         | (8,552)          | 8,563         | 0                                               | 0                         
|                                                                                           |           |             |                     |                           |                  |               |                                                 |                           
|Comprehensive income:                                                                      |           |             |                     |                           |                  |               |                                                 |                           
|Change in unrealized 
      gain on marketable 
      securities, net of 
      tax $(277) | (465)     | 0           | 0                   | 0                         | 0                | 0             | (465)                                           | 0                         
|Net earnings                                                                               | 12,105    | 0           | 0                   | 0                         | 12,105           | 0             | 0                                               | 0                         
|Total comprehensive 
       income                                                         | 11,640    | 0           | 0                   | 0                         | 12,105           | 0             | (465)                                           | 0                         
|Balance, December 31, 
  2000                                                              | $103,645  | $     25    | $      80           | $  35,922                 | $  67,268        | $       0     | $      350                                      | $         0               
|                                                                                           |           |             |                     |                           |                  |               |                                                 |                           







Notes to Consolidated Financial StatementsSevenson Environmental Services, Inc.

Years ended December 31, 2000, 1999 and 1998 
(in thousands, except per share data)



|1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|-- | ------------------------------------------

Description of the Business

The Company provides its services in the United States. The Company's customers include major industrial corporations and government agencies. Because of the nature of the Company's business, which involves large, discrete contracts often completed
within a year, customers that account for a significant portion of revenue in one year may represent an immaterial portion of revenue in subsequent years. Management believes that the loss of the United States government as a customer would have a
material adverse effect on its business.

Basis of Presentation -- All wholly-owned and majority-owned subsidiary companies are included in the consolidated financial statements of the Company. The equity method of accounting is used for companies and other investments in which the
Company has significant influence, generally this represents common stock ownership of at least 20% and not more than 50%. All significant intercompany accounts and transactions have been eliminated.

Related Party Transactions -- SCC Contracting, Inc. ("SCC"), a construction company owned by the five principal shareholders of the Company, has been, and is expected to continue to be, operated out of office facilities owned by the Company and has
used, and is expected to continue to use, to varying degrees, the Company's office personnel, yard and shop facilities, computer resources, equipment and services of the same management and other personnel. The Company rents equipment owned by SCC for
which the Company pays the fair market rental rate.

A formal agreement between the Company and SCC was adopted to provide guidelines for the performance and pricing of intercompany services and use of facilities. This services agreement specifies various formulae to determine charges to be made for the
provision of services and facilities and equipment usage. The formulae are intended to fairly allocate expenses between the businesses. During the years ended December 31, 2000, 1999, and 1998, expenses allocated to SCC amounted to $109, $140 and $136, of
which $28, $49 and $17 remained outstanding as of December 31, 2000, 1999 and 1998, respectively. During the years ended December 31, 2000, 1999 and 1998, SCC allocated expenses of $526, $338, and $168, respectively, to the Company related to the use of
equipment, of which $184, $338, and $168 remained outstanding as of December 31, 2000, 1999 and 1998, respectively.

Segment Information -- The business operations of the Company are concentrated in one segment, which is the remediation of sites and facilities contaminated by hazardous materials including some Company-owned Brownfields.

Cash and Cash Equivalents -- Cash and cash equivalents represent demand deposits with banks, certificates of deposit held by banks or financial institutions, money market funds and commercial paper, all having original maturities of three
months or less. The Company places its temporary cash investments with high credit quality financial institutions.

Investment in Brownfield Real Estate -- Investment in Brownfield real estate represents investments in wholly owned subsidiaries which own various tracts of contaminated land ("Brownfields"). The Company has agreed to perform site remediation
services at the sites. The value of the asset includes the purchase price in addition to costs incurred in the site assessment, remedial design and site remediation. The Company expects the land to be sold upon remediation. The Company will recognize any
gain or loss on the real estate transaction at time of sale. The Company has a tenant on one of its Brownfield properties and records related rental income as other income within its Statement of Earnings.

Fair Value -- The carrying amount for cash and cash equivalents, marketable securities and debt approximates its fair value. The Company's fair value of marketable securities is based on quoted market prices. The Company's fair value of its
existing debt is based on current borrowing rates, similar terms and remaining maturities.

Other Assets -- Other assets represent the cash surrender value of officers' life insurance policies, investment in subsidiary and various other intangible assets. Intangible assets are amortized on a straight-line basis over the estimated
useful lives of the assets, not to exceed 40 years.

Property, Equipment and Depreciation -- Property and equipment are carried at cost and are being depreciated using straight-line methods over the estimated useful lives of the related assets.

Method of Accounting for Contracts -- The accompanying consolidated financial statements have been prepared using the percentage-of-completion method of accounting and, therefore, take into account the costs, estimated earnings and revenue to
date on contracts not yet completed. The amount of revenue recognized is not related to the progress billings to customers.

On all projects, the amount of earnings recognized at the financial statement date is that portion of the total estimated contract earnings that the cost expended bears to the anticipated final cost, based on current estimates of cost to complete the
project.

Contract costs include all direct labor and benefits, materials installed in the project, subcontractor costs, outside vendor equipment rental and other direct costs including shop and yard charges.

As contracts extend over one or more years, revisions in cost and earnings estimates during the course of the project are reflected in the accounting period in which the facts which require the revision become known.

At the time a loss on a contract becomes known, the entire amount of the estimated ultimate loss is recognized in the consolidated financial statements.

Operating Cycle -- Assets and liabilities related to contracts are included in current assets and current liabilities in the accompanying consolidated balance sheets, as they will be liquidated in the normal course of contract completion,
although this may require more than one year.

Selling, General and Administrative Expenses -- These expenses are charged to operations as incurred and are not allocated to contract costs.

Income Taxes -- The Company provides for deferred taxes on all temporary differences (principally depreciation, prepaid expenses, bad debts and contract reserves) which are transactions reported for tax purposes in periods other than for
financial reporting purposes.

Other Income -- Other income primarily represents rental income received from one of the Company-owned Brownfields.

Method of Accounting for Stock-Based Compensation -- The Company adopted Statement of Financial Accounting Standards (SFAS) No. 123, "Accounting for Stock-Based Compensation." As permitted in that standard, the Company has elected to continue
to follow Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," and related interpretations in accounting for employee stock-based compensation.

Earnings Per Share -- Basic earnings per share (EPS) excludes dilution and is computed by dividing net income by the weighted average number of shares outstanding for the period. Diluted EPS would reflect the potential dilution that could occur
if securities or other contracts to issue common stock were exercised or converted into common stock. The calculation of diluted EPS does not consider the effects of antidilution. The diluted earnings per share calculation after rounding was not different
than basic earnings per share calculation.

Comprehensive Income -- The Company has elected to display comprehensive income in the statements of stockholders' equity, net of reclassification adjustments. Reclassification adjustments are made to avoid double counting in comprehensive
income items that are displayed as part of net income for a period that also had been displayed as part of other comprehensive income in that period or earlier periods. The reclassification adjustment before tax for the years ended December 31, 2000, 1999
and 1998 amounted to $(481), $(240), and $(852), respectively. The reclassification adjustment, net tax for the years ended December 31, 2000, 1999 and 1998 amounted to $(302), $(152) and $(571), respectively.

Accounting Standards Pronouncements -- In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 133, Accounting for Derivative Instruments and Hedging Activities. In
June 2000, the FASB issued SFAS No. 138, which amends certain provisions of SFAS No. 133 to clarify areas causing difficulties in implementation. The Statement, as amended, will require the Company to recognize all derivatives on the balance sheet at fair
value. Derivatives that are not hedges of underlying transactions must be adjusted to fair value through income. If the derivative is a hedge, depending on the nature of the hedge, changes in the fair value of derivatives will either be offset against the
change in fair value of the hedged assets, liabilities or firm commitments through earnings or recognized in other comprehensive income until the hedged item is recognized in earnings. The ineffective portion of a derivative's change in fair value will be
immediately recognized in earnings. The Company has completed the process of evaluating the impact that will result from adopting SFAS No. 133, as amended. The Company has not identified any derivatives that meet criteria for a derivative instrument and
does not participate in any hedging activities. As a result, management of the Company concluded that there will be no material effect on the Company's consolidated financial position, results of operations or cash flows resulting from the adoption of
SFAS No. 133, as amended, during the first quarter of 2001.

Sale of Investment -- The Company disposed of its equity method investment in Powerize.com, the internet-based information service provider, on August 1, 2000. For its investment in Powerize.com, the Company received from Hoover's, Inc.
("Hoover's") approximately $1,000 in cash, 315,490 shares of Hoover's stock, and Hoover's guarantee of the payment of outstanding note receivable Powerize.com owes the Company ($1,250 at December 31, 2000). The transaction resulted in the Company's
recording a gain of approximately $300, on sale of this investment. The shares of Hoover's stock received by the Company are recorded within marketable securities in the 2000 balance sheet. During 1999, the Company invested $5,297 in Powerize.com.

Financial information for Powerize.com included assets of $2,617 and liabilities of $2,700 at December 31, 1999 and net loss of $10,806 for the year ended December 31, 1999. The Company's equity in net loss of subsidiary for 2000 and 1999 totaled
$1,418 and $1,483, respectively.

Estimates -- The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and
liabilities and disclosure of contingent assets and liabilities at the date of the financial statements during the reported period. Actual results could differ from those estimates.

Reclassifications -- Certain reclassifications of 1999 and 1998 balances have been made to conform with classifications used in 2000.

|2. | MARKETABLE SECURITIES
|-- | ---------------------

The portfolio of marketable securities consists of equity securities, debt securities, mutual funds and certificates of deposit classified as available-for-sale or trading securities. Investments are reported at fair value estimated based
upon quoted market prices. Realized holding gains and losses are included in earnings. Unrealized holding gains and losses for available-for-sale securities are excluded from earnings and reported as a separate component of stockholders' equity, net of
income taxes. Unrealized holding gains and losses for trading securities are included in earnings. The Company classifies debt securities as trading securities when it is the Company's intent to resell the securities with the objective of generating profits
 .





A summary of marketable securities at December 31, 2000 and 1999 follows:

|                                                        | December 31,
|------------------------------------------------------- | ------------
|                                                        | 2000        
|Available for sale:                                     |             
|Common stock                                            | $  10,118   
|Preferred stock                                         | 0           
|U.S. Government securities                              | 25,887      
|Mutual funds                                            | 3,268       
|Trading securities - at market, which approximates cost | 1,598       
|                                                        |             
|Total                                                   | $40,871     



Gross unrealized holding gains and losses at December 31, 2000 approximated $2,007 and $1,448 respectively, and $2,043 and $757, respectively, at December 31, 1999.

Gross unrealized gains and losses by security are as follows:

|                           | December 31,              
|-------------------------- | --------------------------
|                           | 2000                      
|                           | Gross     
UnrealizedGains
|Common stock               | $  1,502                  
|Preferred stock            | 0                         
|U.S. Government securities | 420                       
|Mutual funds               | 85                        
|                           | $  2,007                  
|                           |                           

Contractual maturities for investments in debt securities available-for-sale at December 31, 2000 and 1999 are as follows:

|                                       | December 31,
|-------------------------------------- | ------------
|                                       | 2000        
|Due in one year or less                | $  3,230    
|Due after one year through three years | 12,378      
|Due after three years                  | 11,877      
|Total                                  | $27,485     

Actual maturities may differ from contractual maturities because some issuers have the right to prepay obligations. Should a need arise for additional funds, it is the Company's opinion that all securities are readily marketable thus the
total investments in debt securities available for sale are included as current assets.

Gross gains of $1,414 in 2000, $1,468 in 1999, and $1,262 in 1998 and gross losses of approximately $933 in 2000, $1,228 in 1999 and $410 in 1998 were realized on the sale of investments. The cost of securities sold is based on the specific
identification method.





|3. | ACCOUNTS RECEIVABLE
|-- | -------------------

|                                                   | December 31,
|-------------------------------------------------- | ------------
|                                                   | 2000        
|                                                   |             
|Current estimates                                  | $ 31,034    
|Retentions                                         | 4,177       
|Due from related companies, officers and employees | 230         
|Other                                              | 8           
|                                                   | 35,499      
|Less allowance for doubtful accounts               | 41          
|Total                                              | $35,408     



The Company anticipates that substantially all retentions will be collected within the next year.

|4. | CONTRACTS IN PROGRESS
|-- | ---------------------

|                                                  | December 31,
|------------------------------------------------- | ------------
|                                                  | 2000        
|                                                  |             
|Accumulated expenditures on contracts in progress | $124,208    
|Estimated earnings thereon                        | 29,882      
|                                                  | 154,090     
|Less applicable progress billings                 | 162,880     
|Total                                             | $  (8,790)  



The contracts are shown in the accompanying consolidated balance sheets as follows:

|                                                                                      | December 31,
|------------------------------------------------------------------------------------- | ------------
|                                                                                      | 2000        
|                                                                                      |             
|Costs and estimated earnings on contracts in progress
  in excess of related billings | $   893     
|Billings on contracts in excess of costs and estimated earnings                       | (9,683)     
|Total                                                                                 | $ (8,790)   
|                                                                                      |             



|5 | NOTES PAYABLE
|- | -------------

Notes payable represents: a) $2,000 owing to the former stockholders of a construction company purchased by the Company in 1981. Interest on these notes accrues at the rate of 9% per annum. These notes must be repaid within six months
after each former stockholder' death. It is anticipated that repayment will be funded by insurance on the life of each former stockholder; b) notes for $1,417 and $1,605 were outstanding as of December 31, 2000 and 1999, respectively, with various vendors
for the purchase of construction equipment. These notes mature at various dates between July 1, 2000 and October 20, 2003 and do not bear interest; c) additional notes for $380 were outstanding as of December 31, 2000 and 1999. These notes mature on
September 1, 2001 and do not bear interest.

|6. | CAPITAL STOCK
|-- | -------------

During 1998, the stockholders approved the Company's re-incorporation in New York State (see Note 1). In connection with such re-incorporation the par value of Common Stock and Class B Common Stock was reduced from $.10 per share to $.01
per share.

The authorized capital stock of the Company consists of 12,000,000 shares of Common Stock, $.01 par value, 8,000,000 shares of Class B Common Stock, $.01 par value, and 1,000,000 shares of Preferred Stock, $.01 par value. The Company has issued
2,520,914; 3,253,470; and 3,212,830 shares of Common Stock and 7,968,931; 7,394,210; and 7,434,850 shares of Class B Common Stock as of December 31, 2000, 1999 and 1998, respectively. No shares of Preferred Stock have been issued. Holders of Common Stock
are entitled to elect 25% of the Board of Directors so long as the number of outstanding shares of Common Stock is at least 10% of the total number of outstanding shares of both classes of Common Stock.

Except for the election or removal of Directors as described above and except for class votes as required by law, holders of both classes of common stock vote as a single class on all matters, with each share of Common Stock having one vote per share
and each share of Class B Common Stock having ten votes per share.

Cash or property dividends to the holders of common stock may be paid as follows:



|(i)  | cash or property dividends may be declared and paid on the Common Stock without being declared and paid on the Class B Common Stock; and                                               
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(ii) | no cash or property dividends may be declared and paid on the Class B Common Stock unless dividends at least 10% greater in amount per share are paid concurrently on the Common Stock.

Dividends paid in shares of Common Stock or Class B Common Stock may be paid as follows:



|(i)  | Shares of Common Stock may be paid to holders of shares of Common Stock or, if there is no Common Stock outstanding, to holders of Class B Common Stock, and shares of Class B Common Stock may be paid to holders of Class B Common Stock; and                                                                                                                                                             
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(ii) | the same number of shares shall be paid in respect of each outstanding share of Common Stock and Class B Common Stock. At the option of the holder of record, each share of Class B Common Stock is convertible at any time into one share of
Common Stock. During 2000,1999 and 1998, 152,200, 40,640, and 51,590 shares, respectively, of Class B Common Stock were converted into shares of Common Stock.

The authorized Preferred Stock is available for issuance from time to time in the future at the discretion of the Board of Directors of the Company, without stockholder approval. The Board of Directors has authority to
prescribe for each series of Preferred Stock it establishes, the relative ranking with other series, the voting rights, if any, the dividend rate, the redemption and liquidation rights, the conversion rights, if any, and any other rights, preferences,
qualifications, limitations or restrictions of the particular series.

The Class B stockholders are parties to an agreement pursuant to which they have a pro rata right of first refusal to purchase shares of Class B Common Stock proposed to be sold or disposed of by any of them to persons other than family members or
executive officers of the Company and their family members, so long as such persons are approved by a majority in interest of the holders of Class B Common Stock. To the extent the rights of first refusal are not exercised, such rights may be assigned to
the Company. Transferees take their shares of Class B Common Stock subject to the Stockholders Agreement. If the right of first refusal is not exercised, the party proposing to dispose of Class B Common Stock must, prior to the disposition, convert such
shares into shares of Common Stock.

The Class B stockholders are parties to a Voting Agreement pursuant to which all shares of Class B Common Stock are to be voted in accordance with the majority vote, except in situations in which there exist certain conflicts of interest. The Voting
Agreement is for a term of ten years and is subject to renewal.

In August 1998, the Board of Directors increased to 1,200,000 the number of shares authorized for repurchase pursuant to a plan originally approved in 1990. Through December 31, 1999 the Company had repurchased a total of 1,111,451 shares for $8,563.
On August 8, 2000, the Board of Directors canceled its 1,111,451 shares of $.01 par value Common Stock held in treasury.

The Board of Directors announced on August 8, 2000, the declaration of a 10% stock dividend payable on August 29, 2000 to shareholders of record on August 22, 2000. The basic and diluted weighted average number of shares outstanding and earnings per
share information for prior reporting periods have been restated to reflect the effects of the stock dividend.

|7. | INCOME TAXES
|-- | ------------

The provision for income taxes is comprised of the following:

|                   | Year ended December
31,
|------------------ | -----------------------
|                   | 2000                   
|Currently payable: |                        
|Federal            | $  6,221               
|State              | 1,248                  
|                   | 7,469                  
|Deferred:          |                        
|Federal            | (258)                  
|State              | (1)                    
|                   | (259)                  
|Total              | $  7,210               



A reconciliation of the federal statutory income tax rate to the effective income tax rate is as follows:

|                                                  | Year ended December 31,
|------------------------------------------------- | -----------------------
|                                                  | 2000                   
|                                                  |                        
|Provision based on statutory rate                 | 35.0%                  
|State income taxes, net of federal 
  tax benefit | 4.2                    
|Tax-exempt interest and dividends                 | (0.9)                  
|Other                                             | (1.0)                  
|Total                                             | 37.3%                  



Deferred taxes relating to temporary differences in the recognition of revenues and expenses for tax and financial reporting purposes is as follows:

|                             | Year ended December 31,
|---------------------------- | -----------------------
|                             | 2000                   
|                             |                        
|Depreciation                 | $ (49)                 
|Prepaid expenses             | 7                      
|Contract reserves            | (71)                   
|Contingency reserve          | 0                      
|Investment in joint ventures | (147)                  
|Other                        | 1                      
|Total                        | $ (259)                

At December 31, 2000 the components of net deferred tax assets/liabilities are as follows:

|                                      | December 31,
|------------------------------------- | ------------
|                                      | 2000        
|                                      |             
|Total of all deferred tax assets      | $  943      
|Total of all deferred tax liabilities | $3,007      

Management has evaluated the available evidence about the future taxable income and other possible sources of realization of deferred tax assets. A valuation allowance against deferred tax assets at the balance-sheet date is not
considered necessary because it is more likely than not the deferred tax asset will be fully realized.

The Company's consolidated U.S. Federal income tax returns have been audited and settled through the year 1995.



|8. | PENSION PLANS
|-- | -------------

The Company participates in industry-wide pension, welfare and health benefit funds for its union employees. These plans are defined contribution plans. Total pension cost in the industry-wide pension, welfare and health benefit funds for
union employees for the years ended December 31, 2000, 1999 and 1998 amounted to approximately $1,711, $2,039 and $1,100. Other eligible employees participate in a Company-sponsored defined contribution money purchase pension plan covering salaried and
office employees and certain hourly employees of the Company for which contributions are made at the rate of 7.0% of defined compensation up to $61 and then 10.5% thereafter. No contribution will be calculated on compensation in excess of $170. Total
pension expense for employees in the defined contribution plans for the years ended December 31, 2000, 1999, and 1998 amounted to $723, $543, and $640, respectively.

In addition, the Company has a defined contribution profit-sharing plan covering most regular non-union employees. The amount of contribution, if any, is at the discretion of the Board of Directors, and is not to exceed the maximum amount deductible
for income tax purposes. Contributions of $500, $300 and $200 were made for the years ended December 31, 2000, 1999 and 1998, respectively.

No significant changes occurred during the period that affected comparability for the aforementioned pension plans, such as a change in the rate of employer contributions, a business combination, or a divestiture. The Company does not maintain any
other post-retirement benefit plans.

|9. | INCENTIVE STOCK PLAN
|-- | --------------------

Effective March 1, 1989, the Company adopted the Sevenson Environmental Services, Inc. 1989 Incentive Stock Plan. The Plan is administered by the Compensation Committee of the Board of Directors and no member of the Committee may
participate in the Plan, except that non-employee Directors, who may be members of the Committee, will receive a non-discretionary option of 4,800 shares of common stock thirty business days after their election to the Board. The Plan authorizes the
Committee to grant to key employees, as it sees fit, incentive stock options, nonqualified stock options, stock appreciation rights and restricted stock. No incentive stock options may be granted after March 1, 1999 and none were granted before that date.
Up to 600,000 shares of Common Stock are available for issuance under the Plan.

The option price per share of options and stock appreciation rights awarded under the Plan may not be less than the fair market value of the Common Stock at the time the option is granted. The total number of shares granted under these options at
December 31, 2000 is 528,200, of which 277,720 shares are currently exercisable and 76,680 shares have been canceled. These options generally expire ten years from the date the options were granted and are subject to forfeiture if certain employment
requirements are not met.



The following summarizes stock option activity for the three years ended December 31, 2000:

|                              | Shares   | Price RangesPer Share
|----------------------------- | -------- | ---------------------
|Outstanding                   |          |                      
|January 1, 1998               | 225,320  | $6.88-$14.00         
|Granted                       | 57,000   | $8.00                
|Cancelled                     | (6,200)  | $10.78-$14.00        
|Outstanding                   |          |                      
|December 31, 1998             | 276,120  | $6.88-$14.00         
|Granted                       | 58,500   | $9.75                
|Cancelled                     | (9,300)  | $6.88-$14.00         
|Outstanding                   |          |                      
|December 31, 1999             | 325,320  | $6.88-$14.00         
|Granted                       | 63,000   | $11.25               
|Cancelled                     | (21,600) | $6.88-$14.00         
|Outstanding December 31, 2000 | 366,720  |                      



|                         | Options Outstanding                   
|------------------------ | --------------------------------------
|Range of Exercise Prices | Number
Outstanding atDecember 31, 2000
|                         |                                       
|$6.88 - $9.75            | 172,620                               
|$10.63 - $14.00          | 194,100                               
|                         | 366,720                               
|                         |                                       

|                         | Options Exercisable                     
|------------------------ | ----------------------------------------
|Range of Exercise Prices | Number
  Exercisable atDecember 31, 2000
|                         |                                         
|$6.88 - $9.75            | 150,920                                 
|$10.63 - $14.00          | 126,800                                 
|                         | 277,720                                 

The Plan also provides for the award of shares of the Company's Common Stock subject to restrictions on disposition ("Restricted Stock"). While the restrictions remain in effect, the participant cannot sell or transfer the shares of
Restricted Stock, but he or she has the other rights of a stockholder, including the right to vote and to receive dividends. Restricted Stock awarded under the Plan is subject to the terms and conditions of the Plan and to other terms and conditions as
the Committee specifies. The participant will forfeit to the Company his or her Restricted Stock if his or her employment with the Company and its subsidiaries terminates for any reason excepting death, prior to the expiration of the restrictions. No
Restricted Stock has been awarded under the Plan.

At December 31, 2000 and 1999, the Company had 366,720 and 325,320 shares outstanding related to stock options with exercise prices of $6.88 to $14.00 in both years at a weighted-average exercise price of $10.00 and $9.76, respectively, and with a
weighted-average remaining contractual life in years of 6.8 and 7.0, respectively. Stock options with respect to 277,720 and 236,940 shares were exercisable at December 31, 2000 and 1999, respectively at a weighted-average exercise price of $10.07 and
$10.15. The weighted-average fair value of stock options granted for the years ended December 31, 2000 and 1999, were $6.35 and $5.41 respectively.

Pro forma information regarding net income and earnings per common share is required by SFAS No. 123 and has been determined as if the Company had accounted for its employee stock options and awards under the fair value method of that standard. The
fair value of those stock options were estimated at the date of grant using a binomial option pricing model with the following weighted-average assumptions for the years ended December 31, 2000 and 1999: risk-free interest rates of 5.25% and 8.50%,
respectively; dividend yields of 1.2% and 1.4%, respectively; volatility factors of the expected market price of the Company's common stock of 46% and 37%, respectively; and a weighted-average expected life of 6.9 and 7.0, respectively.

For purposes of pro forma disclosures, the estimated fair value of the options is amortized to expense over the options' vesting period. The Company's pro forma net earnings and net earnings per common share for the years ended December 31, 2000,
1999, and 1998 were $11,854, $9,535, and $6,416 and $1.13, $1.00, and $.65, respectively.

|10. | MAJOR CUSTOMERS
|--- | ---------------

The Company's two largest customers in 2000 accounted for 27% and 10% of 2000 revenues. The Company's two largest customers in 1999 accounted for 22% and 18% of 1999 revenues. The Company's two largest customers in 1998 accounted for 28%
and 14% of 1998 revenues. Due to the nature of the Company's business, major customers fluctuate from year to year. No other customer accounted for more than 10% of total revenues in any of the three years in the period ended December 31, 2000.

|11. | CONTINGENCIES
|--- | -------------

The Company is a defendant or plaintiff in various claims and lawsuits arising in the normal course of business. The ultimate outcome of these actions cannot presently be determined. It is the opinion of management and its counsel that
there will not be any material adverse effects on the Company's consolidated financial statements as a result of these actions.

During 1999, the Company received a favorable decision in a patent infringement lawsuit. The amount of $975, which was previously accrued for as a liability, was reversed during 1999.

|12. | BACKLOG
|--- | -------

The following schedule shows a reconciliation of backlog representing the amount of revenue the Company expects to realize from work to be performed on uncompleted contracts in progress at December 31, 2000, 1999 and 1998 and from
contractual agreements on which work has not yet begun.

|                             | 2000     | 1999     | 1998    
|---------------------------- | -------- | -------- | --------
|                             |          |          |         
|Balance, January 1           | $112,593 | $ 91,093 | $ 60,596
|Contract adjustments         | 26,429   | 18,336   | 19,756  
|New contracts                | 81,189   | 130,915  | 95,953  
|                             | 220,211  | 240,344  | 176,305 
|Less contract revenue earned | 126,499  | 127,751  | 85,212  
|Balance, December 31         | $ 93,712 | $112,593 | $ 91,093



|13. | QUARTERLY RESULTS (UNAUDITED)
|--- | -----------------------------

Unaudited summarized results for each quarter in 2000 and 1999 are as follows:

|                                     | FirstQuarter | SecondQuarter | ThirdQuarter | FourthQuarter
|------------------------------------ | ------------ | ------------- | ------------ | -------------
|2000:                                |              |               |              |              
|Revenues                             | $ 21,080     | $ 29,956      | $ 39,033     | $ 36,430     
|Gross margin                         | 3,872        | 8,083         | 9,509        | 6,659        
|Provision for income taxes           | 546          | 2,122         | 3,254        | 1,298        
|Net earnings                         | 991          | 3,423         | 5,128        | 2,553        
|Basic and diluted earnings per share | 0.09         | 0.33          | 0.49         | 0.24         
|                                     |              |               |              |              
|1999:                                |              |               |              |              
|Revenues                             | $ 18,108     | $ 27,698      | $ 42,909     | $ 38,477     
|Gross margin                         | 3,639        | 5,935         | 7,306        | 7,061        
|Provision for income taxes           | 456          | 1,181         | 2,031        | 1,942        
|Net earnings                         | 796          | 2,620         | 3,193        | 3,128        
|Basic and diluted earnings per share | 0.08         | 0.25          | 0.30         | 0.30         



Independent Auditors' Report

To the Board of Directors and Stockholders
Sevenson Environmental Services, Inc.
Niagara Falls, New York

We have audited the accompanying consolidated balance sheets of Sevenson Environmental Services, Inc. and subsidiaries as of December 31, 2000 and 1999, and the related consolidated statements of earnings, stockholders' equity, and cash flows for each
of the three years in the period ended December 31, 2000. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

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

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Sevenson Environmental Services, Inc. and subsidiaries as of December 31, 2000 and 1999, and the results of their operations and
their cash flows for each of the three years in the period ended December 31, 2000 in conformity with accounting principles generally accepted in the United States of America.

DELOITTE AND TOUCHE LLPFebruary 14, 2001



Sevenson Environmental Services, Inc.
Management
Board of DirectorsMichael A. EliaPresident and 
Chief Executive OfficerArthur A. EliaFormer President and
Chief Executive OfficerLaurence A. EliaVice President Richard A. EliaExecutive Vice PresidentWilliam J. McDermottVice President, 
Chief Financial Officer and SecretaryDena M. ArmstrongTreasurer and 
Assistant Vice PresidentJoseph J. CastigliaFormer Vice Chairman,
President and 
Chief Executive Officer, 
Pratt & Lambert United, Inc.
(paint, industrial coatings and
adhesives manufacturer)Robert S. KelsoFormer President and
Chief Executive Officer,
Calspan Corporation
(an aerospace research and
development company)Audit CommitteeJoseph J. Castiglia
Robert S. KelsoOfficersMichael A. EliaPresident and 
Chief Executive OfficerRichard A. EliaExecutive Vice PresidentLaurence A. EliaVice PresidentWilliam J. McDermottVice Presldent, 
Chief Financial Officer
and SecretaryDena M. ArmstrongTreasurer and 
Assistant Vice PresidentPaul C. ThomsonVice PresidentMason G. WheelerVice PresidentPaul J. Hitcho, Ph.D.Vice President and
Director of Health 
and SafetyJohn C. Robbins, P.E.Vice PresidentPhilip R. DeLucaVice PresidentMichael L. LockVice PresidentAlan R. Elia, Jr.Vice PresidentEdward M. OddoVice PresidentCorporate InformationHeadquarters2749 Lockport Road
Niagara Falls, NY 14305-2229
(716) 284-0431
www.sevenson.com

OfficesChicago8270 Whitcomb Street 
Merrillville, Indiana 46410
(219) 756-4686Los Angeles2301 E. 28th Street
Suite 301
Long Beach, CA 90806
(562) 424-2671Philadelphia4 Lake View Drive
Chadds Ford, PA 19317
(215) 388-0721Pittsburgh100 Rock Springs Road
Delmont, PA 15626
(412) 468-3377SubsidiariesSevenson Environmental Services 
of PA, Inc.
Sevenson Industrial Services, Inc.Waste Stream
Technology Inc.
302 Grote Street
Buffalo, NY 14207
(716) 876-5290AuditorsDeloitte & Touche LLP
50 Fountain Plaza
Suite 250
Buffalo, New York 14202Transfer Agent and RegistrarAmerican Stock Transfer 
& Trust Company
59 Maiden Lane
New York, New York 10038Stock Listing
National Market tier of 
The Nasdaq Stock Market

EXHIBIT 21

List of Subsidiaries
All Wholly-Owned





|Subsidiary                                  | Where Incorporated
|------------------------------------------- | ------------------
|                                            |                   
|Waste Stream Technology Inc.                | New York          
|                                            |                   
|Sevenson Industrial Services, Inc.          | New York          
|                                            |                   
|Sevenson Environmental Services of PA, Inc. | Pennsylvania      
|                                            |                   
|Sevenson Resources, Inc.                    | California        
|                                            |                   
|Senviro Investment Holdings, Inc.           | Delaware          















Exhibit 23

INDEPENDENT AUDITORS' CONSENT



We consent to the incorporation by reference in Registration Statement No. 333-70223 of Sevenson Environmental Services, Inc. on Form S-8 of our report dated February 14, 2001, appearing in the Annual Report on Form 10-K of Sevenson Environmental
Services, Inc. for the year ended December 31, 2000.



Deloitte & Touche



Buffalo, New York
February 14, 2001