<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB



                  X QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 1999

                                       OR

                   TRANSITION REPORT UNDER SECTION 13 OR 15(d)
                               OF THE EXCHANGE ACT

                         COMMISSION FILE NUMBER 0-22388

                          US INDUSTRIAL SERVICES, INC.

        (EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)

               DELAWARE                             99-0273889
           -------------------------------         -------------------
           (STATE OR OTHER JURISDICTION OF         (I.R.S. EMPLOYER
           INCORPORATION OR ORGANIZATION)          IDENTIFICATION NO.)

                                11011 JONES ROAD
                              HOUSTON, TEXAS 77070
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

                                 (281) 774-7010
                           (ISSUER'S TELEPHONE NUMBER)


         (FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR IF CHANGED
                               SINCE LAST REPORT)

     Check whether the issuer(1) filed all reports required to be filed by
     Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
     such shorter period that the registrant was required to file such reports),
     and (2) has been subject to such filing requirements for the past 90 days.
     Yes [X] No [ ]


         State the number of shares outstanding of each of the issuer's classes
of common equity, as the latest practicable date.

               Class                         Outstanding at March 31, 2000
               -----                         -----------------------------
      Common stock, no par value                        8,763,978

Transitional Small Business Disclosure Format (Check one):  Yes  [ ]; No  [X]




                                       1
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                          PART I. FINANCIAL INFORMATION

     ITEM 1. FINANCIAL STATEMENTS

                         U.S. INDUSTRIAL SERVICES, INC.
                           CONSOLIDATED BALANCE SHEET
                                DECEMBER 31, 1999
                                 (In Thousands)
                                   (Unaudited)

<TABLE>
<S>                                                                                            <C>
     ASSETS
     CURRENT ASSETS
         Cash
                                                                                               $      25
     Accounts receivable, less allowance for doubtful accounts of $118                             3,467
         Notes receivable, current portion                                                         1,509
         Costs and estimated earnings in excess of billings on contracts in progress                   7
         Prepaid expenses and other current assets                                                   297
         Deferred income tax, current portion                                                        275
                                                                                               -----------
                  TOTAL CURRENT ASSETS                                                             5,580
                                                                                               -----------
     PROPERTY, PLANT AND EQUIPMENT, NET                                                            2,982
                                                                                               -----------
     OTHER ASSETS
     Prepaid expenses and other assets                                                                22
         Notes receivable, less current portion                                                    3,573
         Deferred income tax, less current portion                                                 3,262
         Goodwill, net of amortization of $282                                                       653
                                                                                               -----------
                  TOTAL OTHER ASSETS                                                               7,510
                                                                                               -----------
                  TOTAL ASSETS                                                                 $  16,072
                                                                                               ===========
                          LIABILITIES AND SHAREHOLDERS' EQUITY

     CURRENT LIABILITIES
         Accounts payable and accrued liabilities                                              $    1,917
         Current portion of obligations under capital leases                                         612
         Current portion of long-term debt                                                            68
         Due to affiliates, net                                                                    1,576
         Billings in excess of costs and estimated earnings on contracts in progress                 194
                                                                                               -----------
                  TOTAL CURRENT LIABILITIES                                                        4,367
                                                                                               -----------
     LONG-TERM LIABILITIES
         Obligations under capital leases, less current portion                                    1,670
         Long-term debt, less current portion                                                        364
                                                                                               -----------
                  TOTAL LONG-TERM LIABILITIES                                                      2,034
                                                                                               -----------
                  TOTAL LIABILITIES                                                                6,401
                                                                                               -----------
     COMMITMENTS AND CONTINGENCIES

     SHAREHOLDERS' EQUITY
         Common stock, $.01 par value, 25,000 authorized, 8,764 outstanding                           88
         Additional paid-in capital                                                               22,684
         Accumulated deficit                                                                     (13,101)
                                                                                               -----------
                  TOTAL SHAREHOLDERS' EQUITY                                                       9,671
                                                                                               -----------
                  TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                   $  16,072
                                                                                               ===========
</TABLE>



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

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                         U.S. INDUSTRIAL SERVICES, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                FOR THE THREE MONTHS ENDED DECEMBER 31, 1999 AND
                1998 (In Thousands, except for per share amounts)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                             1999             1998
                                                                                             ----             ----
<S>                                                                                          <C>              <C>
REVENUE                                                                                  $  2,560       $    2,163
                                                                                         -----------    ------------
COSTS AND EXPENSES
      Direct costs of revenue                                                               1,900            1,776
      Selling, general and administrative expenses                                            826              437
                                                                                         -----------    ------------
      Total operating costs                                                                 2,726            2,213
                                                                                         -----------    ------------

OPERATING LOSS                                                                               (166)             (50)
                                                                                         -----------    ------------

OTHER EXPENSES (INCOME)
      Interest expense (income)                                                                82              (67)
                                                                                         -----------    ------------

      Total other expenses (income)                                                            82              (67)
                                                                                         -----------    ------------

EARNINGS (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES                               (248)              17

INCOME TAX PROVISION                                                                           --            1,229
                                                                                         -----------    ------------

LOSS FROM CONTINUING OPERATIONS                                                              (248)          (1,212)
                                                                                         -----------    ------------

DISCONTINUED OPERATIONS (NET OF INCOME TAX EFFECT OF $0)
      Earnings from operations of residential asbestos business                                --              275
      Earnings from operations of industrial maintenance business                               8               49
      Gain from sale of industrial maintenance business                                                      3,722
      Gain from sale of residential maintenance business                                       --              852
                                                                                         -----------    ------------
      Total earnings from discontinued operations                                               8            4,898
                                                                                         -----------    ------------

NET EARNINGS (LOSS)                                                                      $   (240)      $    3,686
                                                                                         ===========    ============
BASIC EARNINGS (LOSS) PER COMMON SHARE
      Loss from continuing operations                                                    $  (0.03)      $    (0.14)

      Earnings from discontinued operations                                                    --             0.56
                                                                                         -----------    ------------
      Net earnings (loss) per common share                                               $  (0.03)      $     0.42
                                                                                         ===========    ============
WEIGHTED AVERAGE NUMBER OF SHARES USED IN COMPUTING EARNINGS
      (LOSS) PER COMMON SHARE
         Basic                                                                              8,764            8,764
                                                                                         ===========    ============
</TABLE>




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




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                         U.S. INDUSTRIAL SERVICES, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE THREE MONTHS ENDED DECEMBER 31, 1999 AND 1998
                                 (In Thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                 1999              1998
                                                                                 ----              ----
<S>                                                                              <C>               <C>
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                          $   (1,072)        $      307
                                                                             -------------     --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
     Proceeds from notes receivable                                                 984                 --
     Increase in investment                                                          --               (306)
     Capital expenditures                                                          (238)                --
                                                                             -------------
Net cash provided by (used in) investing activities                                 746               (306)
                                                                             -------------     --------------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Net advances (payments) on capital leases and long-term debt                    71             (7,491)
     Net payments on notes receivable                                                --               (335)
     Net proceeds from sale of assets                                                --              7,307
                                                                             -------------     --------------
Net cash provided by (used in) financing activities                                  71               (519)
                                                                             -------------     --------------

NET DECREASE IN CASH                                                               (255)             (518)

CASH AT BEGINNING OF PERIOD                                                         280              2,350
                                                                             -------------     --------------

CASH AT END OF PERIOD                                                        $       25        $     1,832
                                                                             =============     ==============
</TABLE>











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



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                          US INDUSTRIAL SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (In Thousands, except Per Share Amounts)
                                  (Unaudited)

NOTE 1.  BASIS OF PRESENTATION

The accompanying unaudited interim consolidated financial statements have been
prepared by US Industrial Services, Inc., (the "Company"), in accordance with
generally accepted accounting principles pursuant to Regulation S-B of the
Securities and Exchange Commission. Certain information and footnote disclosures
normally included in audited financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted.
Accordingly, these interim consolidated financial statements should be read in
conjunction with the Company's consolidated financial statements and related
notes as contained in Form 10-KSB for the year ended September 30, 1999. In the
opinion of management, the interim consolidated financial statements reflect all
adjustments, including normal recurring adjustments, necessary for fair
presentation of the interim periods presented. The results of operations for the
three months ended December 31, 1999 are not necessarily indicative of results
of operations to be expected for the full year.

The accompanying consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries, P.W. Stephens Contractors, Inc. and
P.W. Stephens Services, Inc. (collectively referred to as "St. Louis"), and, for
the time period operated, J.L. Manta, Inc. and P.W. Stephens Residential, Inc.
In addition, the P.W. Stephens Contractors, Inc. and QHI Stephens Contractors,
Inc. subsidiaries were discontinued in May 1997, Manta's assets and liabilities
were sold in November 1998 and Residential's assets and liabilities were sold in
December 1998 and have been accounted for as discontinued operations for all
current periods reported under this Form 10QSB.

Net Income Per Share Information

The net income per share amounts have been computed by dividing net income by
the weighted average number of common shares outstanding during the respective
periods.

In February 1997, The Financial Accounting Standards Board Issued Statement No.
128, "Earnings Per Share", which was required to be adopted on December 31,
1997. Statement 128 replaced the previously reported primary and fully diluted
earnings per share with basic and diluted earnings per share. Unlike primary
earnings per share, basic earnings per share excludes any dilutive effects of
options, warrants, and convertible securities. Diluted earnings per share is
consistent with the previously reported fully diluted earnings per share. All
earnings per share amounts for all periods have been presented, and where
necessary, restated to conform to the Statement 128 requirements.

Revenue Recognition

The Company recognizes revenues and profits on contracts using the
percentage-of-completion method. Under the percentage-of-completion method,
contract revenues are accrued based upon the percentage that accrued costs to
date bear to total estimated costs. As contracts can extend over more than one
accounting period, revisions in estimated total costs and profits during the
course of work are reflected during the period in which the facts requiring the
revisions become known. Losses on contracts are charged to income in the period
in which such losses are first determined.

The percentage-of-completion method of accounting can result in the recognition
of either costs and estimated profits in excess of billings or billings in
excess of costs and estimated profits on contracts in progress, which are
classified as current assets and liabilities, respectively, in the accompanying
balance sheet. The current asset account represents costs incurred and profits
earned that have not been billed to the customer on uncompleted construction
contracts. The current liability account represents deferred income on
uncompleted construction contracts. Generally accepted accounting principles for
percentage-of-completion accounting require the classifications as current
assets and liabilities. Revenues from time and material contracts are recognized
currently as the work is performed.

Reclassifications

Certain reclassifications have been made to prior period financial statements to
conform with the current year presentation.


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<PAGE>   6
                          US INDUSTRIAL SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     (In Thousands, except Per Share Amounts)
                                   (Unaudited)

NOTE 2.  DISCONTINUED OPERATIONS

During the first quarter of fiscal year 1999, the Company sold the assets and
liabilities of Manta and Residential. The results of operations for the
respective periods presented are reported as a component of discontinued
operations in the consolidated statement of operations. Sales from discontinued
operations were $12,910 and earnings from discontinued operations were $324 for
the quarter ended December 31, 1998. There were no sales from these operations
and earnings of only $8 for the quarter ended December 31, 1999.

NOTE 3.  LITIGATION, COMMITMENTS AND CONTINGENCIES

The nature and scope of the Company's business operations bring it into regular
contact with the general public, a variety of businesses and government
agencies. These activities inherently subject the Company to potential
litigation, which are defended in the normal course of business. At December 31,
1999, there were various claims and disputes incidental to the business. The
Company believes that the disposition of all such claims and disputes,
individually or in the aggregate, should not have a material adverse affect upon
the Company's financial position, results of operations or cash flows. As of
December 31, 1999, the Company has not been named as a responsible party for any
environmental issues under the Federal Superfund Law.

NOTE 4.  SUBSEQUENT EVENT

The Company has identified a transaction that when concluded would involve a
strategic merger with an industrial service provider whereby a significant
number of additional shares of the Company would be issued to the strategic
merger partner pending the Company bringing its filings current with the
Securities and Exchange Commission. Management has the ability and intent to
consummate this transaction. This transaction is subject to customary due
diligence, board, and shareholder approval.




                                       6
<PAGE>   7

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

OVERVIEW

In November 1998, the Company adopted a strategic plan to dispose of all
industrial service and environmental companies with the goal of revitalizing the
Company with a strong balance sheet and engaging in a line of business related
to another industry. The implementation of this strategy began when the Company
sold the assets and liabilities of Manta on November 30, 1998. The second step
was completed on December 31, 1998 when the Company sold the assets and
liabilities of P.W. Stephens Residential, Inc. Management is continuing to
evaluate strategic alternative.

RESULTS OF OPERATIONS

General

The Company currently operates primarily in the environmental remediation
services industry through St. Louis. The other services formerly provided by the
Company have been classified as discontinued operations in the accompanying
financial statements. The following discussion and analysis relate to the
Company's continuing operations. The results of operations for the three months
ended December 31, 1999 are not necessarily indicative of results of operations
to be expected for the full year.

Revenue

Revenue during the three months ended December 31, 1999, increased 18% to
$2,560,000 from $2,163,000 for the same period in 1998 continues to relate
primarily to performance under a significant contract for soil remediation at
the Hanford Nuclear Project in Hanford, Washington, that began in March 1999.

Gross Profit

Gross profit during the three months ended December 31, 1999, increased 71% to
$660,000 from $387,000 for the same period in 1998. The increase in the gross
profit margin can be attributed to the increased sales activity. Gross profit
margins increased from 17.9% to 25.8% primarily due to cost controls on various
projects and improved gross margins on selected smaller contracts.

Selling, General and Administrative Expenses (SG&A)

SG&A during the three months ended December 31, 1999, increased 89% to $826,000
from $437,000 for the same period in 1998. As a percentage of revenues, SG&A
increased from 20.2% in fiscal 1999 to 32.3% in fiscal 1998.

Other Expenses

Interest expense during the three months ended December 31, 1999, was $85,000
compared to income of $67,000 for the same period in 1998.

Net Earnings (Loss)

Net loss for the three months ended December 31, 1999 was $240,000 compared to
earnings of $3,686,000 for the same period in 1998. The primary reason for the
difference is due to the recognition in 1998 of gains on the sales of the assets
and liabilities of Manta and Residential, offset somewhat by the income tax
provision of $1,220,000. There were no similar transactions in 1999.




                                        7
<PAGE>   8
Liquidity and Capital Resources

The Company believes that the proceeds from the sale of assets, the cash flows
from the existing operations of St. Louis coupled with the financing
arrangements the Company currently has in place will be sufficient throughout
the next twelve months to finance its working capital needs, planned capital
expenditures, debt service and the outstanding obligations from the Company's
discontinued operations. Implementation of the Company's strategic plan of
expanding into another line of business may require additional capital.

RISKS ASSOCIATED WITH FORWARD-LOOKING STATEMENT INCLUDED IN THIS FORM 10-QSB

This Form 10-QSB contains certain forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, which are intended to be covered by the safe harbors
created thereby. These statements include the plans and objectives of management
for future operations, including plans and objectives relating to future growth
of the Company's business activities and availability of funds. The
forward-looking statements included herein are based on current expectations
that involve numerous risks and uncertainties. Assumptions relating to the
foregoing involve judgments with respect to, among other things, future
economic, competitive and market conditions, regulatory framework, and future
business decisions, all of which are difficult or impossible to predict
accurately and many of which are beyond the control of the Company. Although the
Company believes that the assumptions underlying the forward-looking statements
are reasonable, any of the assumptions could be inaccurate and, therefore, there
can be no assurance that the forward-looking statements included in this Form
10-QSB will prove to be accurate. In light of the significant uncertainties
inherent in the forward-looking statements included herein, the inclusion of
such information should not be regarded as a representation by the Company or
any other person that the objectives and plans of the Company will be achieved.

YEAR 2000 MATTERS

The Year 2000 Issue is the result of computer programs being written using two
digits rather than four digits to define the applicable year. Any of the
company's computer programs that have data-sensitive software may recognize a
date using "00" as the year 1900 rather than the year 2000. This could result in
a system failure or miscalculations causing disruptions of operations,
including, among other things, a temporary inability to process transactions,
send invoices or engage in other routine business activities.

During 1999, the Company conducted an assessment of issues related to the Year
2000 Issue and determined that no issues existed which would cause its computer
systems not to properly utilize dates beyond December 31, 1999. At this time,
the Company cannot fully determine the impact that Year 2000 Issues will have on
its customers or suppliers. If the Company's customers or suppliers do not
convert their systems to become Year 2000 compliant, the Company may be
adversely impacted. The Company believes, however, that its vendors and
customers are in compliance with the Year 2000 Issue and has not had any
material problems. The Company has completed the Year 2000 project.




                                       8
<PAGE>   9
                           PART II. OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

The nature and scope of the Company's business operations bring it into regular
contact with the general public, a variety of businesses and government
agencies. These activities inherently subject the Company to potential
litigation, which are defended in the normal course of business. Management
believes that such proceedings are either adequately covered by insurance, or if
uninsured, by the estimated losses it has recorded to date. The resolution of
such claims, however, could have a material effect on the Company's results of
operations or cash flows.

ITEM 5.  OTHER INFORMATION

The following matters have not been previously reported by the Company in a
Report on Form 8-k:

         None

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

(a)      EXHIBITS

    27.0            Financial Data Schedule

(b) REPORTS ON FORM 8-K

         None




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                                   SIGNATURES

In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereto duly
authorized.

                                    US INDUSTRIAL SERVICES, INC.



April 27, 2000                      By: /s/ MICHAEL E. MCGINNIS
                                        -----------------------
                                            Michael E. McGinnis
                                            Chairman, CEO and President

April 27, 2000                      By: /s/ MIKE APPLING JR.
                                        --------------------
                                            Mike Appling Jr.
                                            Chief Financial Officer





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                                 EXHIBIT INDEX

Exhibit
  No.              Description
-------            -----------

 27.0              Financial Data Schedule