UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549


                                    FORM 10-Q

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

                  For the Quarterly Period Ended June 30, 2003

                                       OR


( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

For the transition period from________________________to________________________


                         Commission File Number 0-11688


                          AMERICAN ECOLOGY CORPORATION
             ------------------------------------------------------
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                     DELAWARE                       95-3889638
           -------------------------------     ----------------------
           (State or other jurisdiction of       (I.R.S. Employer
            incorporation or organization)     Identification Number)

                Lakepointe Centre I,
            300 E. Mallard, Suite 300
                   Boise, Idaho                        83706
        ----------------------------------------     ----------
        (Address of principal executive offices)     (Zip Code)


                                 (208) 331-8400
              ----------------------------------------------------
              (Registrant's telephone number, including area code)

Indicate  by  a  check  mark  whether  the  Registrant (1) has filed all reports
required  to  be filed by Sections 13 or 15(d) of the Securities Exchange Act of
1934  during  the  preceding  12 months, and (2) has been subject to such filing
requirements for the past 90 days.
                                               Yes  [X]      No [ ]

Indicate  by  check  mark  whether  the  registrant  is an accelerated filer (as
defined in Rule 12b-2 of the Act).
                                               Yes  [ ]      No [X]

At  August  8,  2003  Registrant had outstanding 16,965,748 shares of its Common
Stock.


<PAGE>
<TABLE>
<CAPTION>
                          AMERICAN ECOLOGY CORPORATION
                      QUARTERLY REPORT ON FORM 10-Q FOR THE
                        THREE MONTHS ENDED JUNE 30, 2003


                                TABLE OF CONTENTS


                          PART I. FINANCIAL INFORMATION

                                                                                            PAGE
<S>                                                                                         <C>
Item 1.        Financial Statements

               Consolidated Balance Sheets
                 (Unaudited)                                                                   4

               Consolidated Statements of Operations
                 (Unaudited)                                                                   5

               Consolidated Statements of Cash Flows
                 (Unaudited)                                                                   6

               Notes to Consolidated Financial Statements                                      7

Item 2.        Management's Discussion and Analysis of Financial Condition and Results of
                   Operations                                                                 17

Item 3.        Quantitative and Qualitative Disclosures About Market Risk                     24

Item 4.        Controls and Procedures                                                        25


                            PART II.   OTHER INFORMATION


Item 1.        Legal Proceedings                                                              25

Item 2.        Changes in Securities and Use of Proceeds                                      27

Item 3.        Defaults Upon Senior Securities                                                27

Item 4.        Submission of Matters to a Vote of Security Holders                            27

Item 5.        Other Information                                                              27

Item 6.        Exhibits and Reports on Form 8-K                                               27

               Signatures                                                                     28
</TABLE>


                                        2
<PAGE>
OFFICERS
--------
Stephen A. Romano
Chief Executive Officer, President and Chief Operating Officer

James R. Baumgardner
Senior Vice President, Chief Financial Officer
Treasurer and Secretary

Michael J. Gilberg
Vice President and Controller

DIRECTORS
---------
Roger P. Hickey, Chairman
President, Chicago Partners

David B. Anderson
Principal, Lochborn Partners LLC

Rotchford L. Barker
Independent Businessman

Roy C. Eliff
Independent Businessman

Edward F. Heil
Sole Member
E.F. Heil, LLC

Stephen A. Romano
Chief Executive Officer, President and Chief Operating Officer

Stephen M. Schutt
Vice President
Nuclear Fuel Services, Inc.


CORPORATE OFFICE
----------------
Lakepointe Centre I
American Ecology Corporation
300 East Mallard Drive, Suite 300
Boise, Idaho 83706
(208) 331-8400
(208) 331-7900 (fax)
www.americanecology.com
-----------------------


COMMON STOCK
------------
American Ecology Corporation's common stock trades on the Nasdaq National Market
under the symbol ECOL.


FINANCIAL REPORTS
-----------------
A copy of American Ecology Corporation Annual and Quarterly Reports, as filed on
Form 10-K and 10-Q with the Securities and Exchange Commission, may be obtained
by writing:
Lakepointe Centre I
300 E. Mallard, Suite 300
Boise, Idaho 83706
or at www.americanecology.com
      -----------------------


TRANSFER AGENT
--------------
Mellon Investor Services LLC
Overpeck Centre
85 Challenger Road
Ridgefield Park, New Jersey 07660
(201) 296-4000
or at www.mellon-investor.com
      -----------------------


AUDITOR
-------
Moss Adams LLP
1001 Fourth Avenue, Suite 2900
Seattle, WA 98154


                                        3
<PAGE>
<TABLE>
<CAPTION>
PART I.  FINANCIAL INFORMATION
------------------------------
ITEM 1.  FINANCIAL STATEMENTS.

                                          AMERICAN ECOLOGY CORPORATION
                                          CONSOLIDATED BALANCE SHEETS
                                     ($ IN 000'S EXCEPT PER SHARE AMOUNTS)

                                                                            June 30, 2003    December 31, 2002
                                                                           ---------------  -------------------
<S>                                                                        <C>              <C>
                                                                             (Unaudited)
ASSETS
Current Assets:
    Cash and cash equivalents                                              $        4,750   $              135
    Receivables, net                                                                9,167               10,460
    Income taxes receivable                                                           740                  740
    Prepayments and other                                                             659                  498
    Deferred income taxes                                                              --                2,745
    Assets held for sale or closure                                                 4,068               10,722
                                                                           ---------------  -------------------
       Total current assets                                                        19,384               25,300

Cash and investment securities, pledged                                               244                  244
Property and equipment, net                                                        27,434               26,998
Facility development costs                                                          6,478               27,430
Deferred income taxes                                                               8,284                5,539
Other assets                                                                           59                  129
Assets held for sale or closure                                                     2,239                1,485
                                                                           ---------------  -------------------
       Total Assets                                                        $       64,122   $           87,125
                                                                           ===============  ===================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
    Current portion of long term debt                                      $        1,455   $            1,985
    Accounts payable                                                                2,697                2,192
    Accrued liabilities                                                             3,722                4,166
    Accrued closure and post closure obligation, current portion                      882                  882
    Income taxes payable                                                               19                   23
    Current liabilities of assets held for sale or closure                          5,322                7,965
                                                                           ---------------  -------------------
       Total current liabilities                                                   14,097               17,213

Revolving line of credit                                                               --                  603
Long term accrued liabilities                                                         521                2,372
Long term debt                                                                      4,810                5,972
Accrued closure and post closure obligation, excluding current portion              9,479                9,318
Liabilities of assets held for sale or closure, excluding current portion           5,571                5,699
                                                                           ---------------  -------------------
       Total liabilities                                                           34,478               41,177
                                                                           ---------------  -------------------

Commitments and contingencies
Stockholders' equity:
    Convertible preferred stock, 1,000,000 shares authorized,
      Designated as follows:
        Series D cumulative convertible preferred stock, $.01 par value,
        0 and 100,001 shares issued and outstanding;                                   --                    1
    Common stock, $.01 par value, 50,000,000 authorized, 16,965,748
      and 14,539,264 shares issued and outstanding                                    170                  145
    Additional paid-in capital                                                     54,679               55,789
    Accumulated deficit                                                           (25,205)              (9,987)
                                                                           ---------------  -------------------
       Total stockholders' equity                                                  29,644               45,948
                                                                           ---------------  -------------------
Total Liabilities and Stockholders' Equity                                 $       64,122   $           87,125
                                                                           ===============  ===================
</TABLE>

See notes to consolidated financial statements.


                                        4
<PAGE>
<TABLE>
<CAPTION>
                                                   AMERICAN ECOLOGY CORPORATION
                                               CONSOLIDATED STATEMENTS OF OPERATIONS
                                                            (UNAUDITED)
                                               ($ IN 000'S EXCEPT PER SHARE AMOUNTS)


                                                                    Three Months Ended June 30,       Six Months Ended June 30,
                                                                      2003              2002            2003             2002
                                                                -----------------  --------------  ---------------  --------------
                                                                                     (Restated)                       (Restated)
<S>                                                             <C>                <C>             <C>              <C>
Revenue                                                         $         12,020   $      10,605   $       22,791   $      24,029
Direct operating costs                                                     6,056           5,841           12,040          12,016
                                                                -----------------  --------------  ---------------  --------------

Gross profit                                                               5,964           4,764           10,751          12,013
Selling, general and administrative expenses                               3,289           2,207            7,786           5,748
                                                                -----------------  --------------  ---------------  --------------
Income from operations                                                     2,675           2,557            2,965           6,265

Investment income                                                             22              16               22              27
Interest expense                                                              38             243              159             508
Loss on write off of Ward Valley facility development costs                   --              --           20,951              --
Other income (loss)                                                           93             140               93            (325)
                                                                -----------------  --------------  ---------------  --------------

Net income (loss) before income tax, discontinued operations,
and cumulative effect of change in accounting principal                    2,752           2,470          (18,030)          5,459
Income tax expense                                                            63              --               55              --
                                                                -----------------  --------------  ---------------  --------------

Net income (loss) before discontinued operations and
cumulative effect of change in accounting principal                        2,689           2,470          (18,085)          5,459
Gain from discontinued operations - El Centro Landfill                        16              34            4,960             224
(Loss) from discontinued operations -
Oak Ridge LLRW Facility                                                     (692)           (303)          (2,029)           (704)
                                                                -----------------  --------------  ---------------  --------------

Net Income (loss) before cumulative effect of change in
accounting principle                                                       2,013           2,201          (15,154)          4,979
Cumulative effect of change in accounting principle                           --              --               --          13,141
                                                                -----------------  --------------  ---------------  --------------

Net income (loss)                                                          2,013           2,201          (15,154)         18,120
Preferred stock dividends                                                     --              99               64             197
                                                                -----------------  --------------  ---------------  --------------

Net income (loss)  available to common shareholders             $          2,013   $       2,102   $      (15,218)  $      17,923
                                                                =================  ==============  ===============  ==============

Basic earnings (loss) from continuing operations                             .16             .16            (1.12)            .37
Basic earnings (loss) from discontinued operations                          (.04)           (.02)             .18            (.03)
Basic earnings from cumulative effect of
accounting change                                                             --              --               --             .93
                                                                -----------------  --------------  ---------------  --------------
Basic earnings (loss) per share                                 $            .12   $         .14   $         (.94)  $        1.27
                                                                =================  ==============  ===============  ==============

Diluted earnings (loss) from continuing operations                           .15             .14            (1.12)            .33
Diluted earnings (loss) from discontinued operations                        (.04)           (.02)             .18            (.03)
Diluted earnings from cumulative effect of
accounting change                                                             --              --               --             .84
                                                                -----------------  --------------  ---------------  --------------
Diluted earnings (loss) per share                               $            .11   $         .12   $         (.94)  $        1.14
                                                                =================  ==============  ===============  ==============

Dividends paid per common share                                 $             --   $          --   $           --   $          --
                                                                =================  ==============  ===============  ==============
</TABLE>

See notes to consolidated financial statements.


                                        5
<PAGE>
<TABLE>
<CAPTION>
                                 AMERICAN ECOLOGY CORPORATION
                             CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    (UNAUDITED, $ IN 000'S)


                                                                  Six Months Ended June 30,
                                                               -------------------------------
                                                                    2003            2002
                                                               --------------  ---------------
<S>                                                            <C>             <C>
Cash flows from operating activities:                                             (Restated)
  Net income (loss)                                            $     (15,154)  $       18,120
  Adjustments to reconcile net income (loss) to net
    cash provided by operating activities:
  Depreciation, amortization and accretion                             3,704            2,993
  (Income) loss from discontinued operations                          (2,931)             480
  Cumulative effect of change in accounting principle                     --          (13,141)
  Write off of Ward Valley project                                    20,951               --
Changes in assets and liabilities:
  Receivables                                                          1,351              (37)
  Other assets                                                          (161)            (625)
  Accounts payable and accrued liabilities                              (198)          (3,357)
  Closure and post closure obligation                                   (449)            (535)
  Income taxes payable                                                    (4)             (60)
                                                               --------------  ---------------
         Net cash provided by operating activities                     7,110            3,838

Cash flows from investing activities:
  Capital expenditures                                                (3,151)          (1,750)
                                                               --------------  ---------------
         Net cash used by investing activities                        (3,151)          (1,750)

Cash flows from financing activities:
  Payments of indebtedness                                            (2,295)          (5,503)
  Retirement of series D preferred stock                              (6,406)              --
  Stock options and warrants exercised                                 3,664              999
                                                               --------------  ---------------
         Net cash provided by (used in) financing activities          (5,037)             145
                                                               --------------  ---------------

Decrease in cash and cash equivalents                                 (1,078)          (2,416)
Net cash provided by (used in) discontinued operations                 5,693           (1,334)
Cash and cash equivalents at beginning of period                         135            4,217
                                                               --------------  ---------------
Cash and cash equivalents at end of period                     $       4,750   $          467
                                                               ==============  ===============

Supplemental disclosures of cash flow information:
Cash paid during the year for:
  Interest                                                     $         159   $          508
  Income taxes paid                                                       59                5
Non-cash investing and financing activities:
  Stock issuance-director's compensation                                  23               --
  Preferred stock dividends accrued                                       --              197
  Transfer of prepaid assets to settle closure liability                  --              462
</TABLE>

See notes to consolidated financial statements.


                                        6
<PAGE>
AMERICAN ECOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.   BASIS OF PRESENTATION

In  the opinion of management, the accompanying unaudited consolidated financial
statements  contain  all adjustments and disclosures necessary to present fairly
the  financial  position,  results  of  operations,  and  cash flows of American
Ecology  Corporation  and  its  wholly-owned subsidiaries (the "Company"). These
financial  statements and notes should be read in conjunction with the financial
statements  and  notes  included in the Company's Annual Report on Form 10-K for
the  year  ended  December  31,  2002,  filed  with  the Securities and Exchange
Commission.

The  previously  reported 2002 quarterly information has been restated, see Note
9.

Certain  reclassifications  of  prior  quarter amounts have been made to conform
with  current quarter presentation, none of which affect previously recorded net
income.

NOTE 2.   EARNINGS PER SHARE

Basic  earnings  per  share are computed based on net income available to common
stockholders and the weighted average number of common shares outstanding during
the  quarter.  Diluted earnings per share reflect the assumed issuance of common
shares  for  outstanding  options and conversion of warrants. The computation of
diluted  earnings per share does not assume exercise or conversion of securities
whose  exercise  price  is greater than the average common share market price as
the  assumed  conversion  of these securities would increase earnings per share.
The computation of diluted loss per share does not assume exercise or conversion
of  any  securities  as the assumed conversion of securities would decrease loss
per  share.

<TABLE>
<CAPTION>
                                                                     THREE MONTHS ENDED         SIX MONTHS ENDED
                                                                  -------------------------  ----------------------
            ($in thousands except per share amounts)                     2003         2002       2003         2002
                                                                  ------------  -----------  ---------  -----------
                                                                                 (Restated)              (Restated)
<S>                                                               <C>           <C>          <C>        <C>
Income (loss) before discontinued operations and cumulative
    effect of accounting change                                   $     2,689   $    2,470   $(18,085)  $    5,459
Income (loss) from operations of discontinued segments                   (676)        (269)     2,931         (480)
Cumulative effect of accounting change                                     --           --         --       13,141
                                                                  ------------  -----------  ---------  -----------
Net income (loss)                                                       2,013        2,201    (15,154)      18,120
Preferred stock dividends                                                  --           99         64          197
                                                                  ------------  -----------  ---------  -----------
Net income (loss) available to common shareholders                $     2,013   $    2,102   $(15,218)  $   17,923
                                                                  ============  ===========  =========  ===========

Weighted average shares outstanding-
  Common shares                                                        16,969       14,408     16,223       14,094
 Effect of dilutive shares
  Series E Warrants                                                        --        1,238         --          911
  Chase Bank Warrants                                                     629          711         --          523
  Stock Options                                                           112          287         --          201
                                                                  ------------  -----------  ---------  -----------

Average shares                                                         17,710       16,644     16,223       15,729
                                                                  ============  ===========  =========  ===========

Basic earnings (loss) per share from continuing operations        $       .16   $      .16   $  (1.12)  $      .37
Basic earnings (loss) per share from discontinued operations             (.04)        (.02)       .18         (.03)
Basic earnings per share from cumulative effect of accounting
change                                                                     --           --         --          .93
                                                                  ------------  -----------  ---------  -----------
Basic earnings (loss) per share                                   $       .12   $      .14   $   (.94)  $     1.27
                                                                  ============  ===========  =========  ===========

Diluted earnings (loss) per share from continuing operations      $       .15   $      .14   $  (1.12)  $      .33
Diluted earnings (loss) per share from discontinued operations           (.04)        (.02)       .18         (.03)
Diluted earnings per share from cumulative effect of accounting
change                                                                     --           --         --          .84
                                                                  ------------  -----------  ---------  -----------
Diluted earnings (loss) per share                                 $       .11   $      .12   $   (.94)  $     1.14
                                                                  ============  ===========  =========  ===========
</TABLE>


                                        7
<PAGE>
NOTE 3.   EQUITY

In  1996,  the  Company issued 300,000 shares of Series E Redeemable Convertible
Preferred  Stock  ("Series  E  Preferred  Stock") that were retired in 1998. The
Series  E  Preferred  Stock  carried  warrants ("Series E Warrants") to purchase
3,000,000  shares  of  common  stock  with  a $1.50 per share exercise price. In
February  2003, three Series E Warrant holders exercised the remaining 2,350,000
Series  E  Warrants  at  an exercise price of $1.50 per share. Consequently, the
Company issued 2,350,000 shares of common stock and received $3,525,000 in cash.
There  are  no  Series  E  warrants  outstanding.

In  September  1995,  the  Board of Directors authorized the issuance of 105,264
shares  of  preferred stock designated as 8 3/8% Series D Cumulative Convertible
Preferred  Stock  ("Series  D  Preferred  Stock"),  which were sold in a private
offering  to a group of present and past members of the Board of Directors. Each
of  the  remaining 100,001 shares of Series D Preferred Stock was convertible at
any  time  at the option of the holder into 17.09 shares of the Company's common
stock,  equivalent  to  a conversion price of $3.71 per share due to dilution by
subsequent  sales  of  common  stock.

In  January  2003,  the  Company  extended  an  offer to all holders of Series D
Preferred Stock to repurchase their stock for the original sales price of $47.50
a share plus accrued but unpaid dividends. Repurchase was subject to approval of
the  Company's  Board  of  Directors  and  primary  bank,  Wells Fargo Bank, and
required  a minimum of 67% of the Series D Preferred Stock to be tendered by the
Series  D Preferred Stockholders. The offer was accepted by all Series D holders
and  approved  by  the  Company's  Board  of Directors and Wells Fargo Bank.  On
February  28,  2003,  the  Company  repurchased  the remaining 100,001 shares of
Series  D  Preferred  Stock  for the original sales price of $47.50 a share plus
accrued  but  unpaid  dividends  of  $16.56  a  share,  for  a  total payment of
$6,406,000.

NOTE 4.   OPERATING SEGMENTS

The Company operates with two segments based on its internal reporting structure
and nature of services offered, Operating Disposal Facilities, and Non-Operating
Disposal  Facilities.  The  Operating  Disposal  Facility  segment  represents
facilities  accepting  industrial,  hazardous  and  radioactive  waste.  The
Non-Operating  Disposal  Facility segment includes facilities that are no longer
accepting  waste, no longer owned by the Company, or represent new disposal site
development  projects  awaiting  approval  to  accept  waste.

On  December 27, 2002, the Company discontinued commercial operations in its Low
Level  Radioactive  Waste  ("LLRW")  Processing and Field Services segment which
aggregated,  volume-reduced,  and  performed  remediation  and other services on
radioactive  material.  All prior segment information has been restated in order
to  present  the  operations  at  the  Oak  Ridge  facility, including the Field
Services  division,  as  discontinued  operations.

Effective  December  31,  2002,  the  Company classified the El Centro municipal
landfill  as  an  asset  held  for sale due to the expected sale of the facility
which  occurred  on  February  13,  2003. All prior segment information has been
restated in order to present the El Centro landfill as a discontinued operation.

Income  taxes are assigned to Corporate, but all other items are included in the
segment  where they originated.  Inter-company transactions have been eliminated
from  the  segment  information  and  are  not  significant  between  segments.


                                        8
<PAGE>
Summarized financial information concerning the Company's reportable segments is
shown  in  the  following  table  ($  in  thousands).

<TABLE>
<CAPTION>
                                              Operating    Non-Operating     Discontinued
                                              Disposal       Disposal       Processing and
                                             Facilities     Facilities      Field Services    Corporate     Total
<S>                                          <C>          <C>              <C>               <C>          <C>
THREE MONTHS ENDED JUNE 30, 2003
--------------------------------
Revenue                                      $    11,969  $           51   $            --   $       --   $ 12,020
Direct operating cost                              5,929             127                --           --      6,056
                                             -----------  ---------------  ----------------  -----------  ---------
Gross profit (loss)                                6,040             (76)               --           --      5,964
S,G&A                                              1,831             284                --        1,174      3,289
                                             -----------  ---------------  ----------------  -----------  ---------
Income (loss) from operations                      4,209            (360)               --       (1,174)     2,675
Interest                                              --              --                --           16         16
Other income                                          26              67                --           --         93
                                             -----------  ---------------  ----------------  -----------  ---------
Income (loss) before income tax
and discontinued operations                        4,235            (293)               --       (1,190)     2,752
Income tax expense                                    --              --                --           63         63
Discontinued operations                               16              --              (692)          --       (676)
                                             -----------  ---------------  ----------------  -----------  ---------
Net Income (loss)                                  4,251            (293)             (692)      (1,253)     2,013
                                             ===========  ===============  ================  ===========  =========
Depreciation, amortization, and
accretion                                    $     1,990  $            1   $            --   $        9   $  2,000
Capital Expenditures                         $     1,427  $           --   $            --   $       --   $  1,427
Total Assets                                 $    37,119  $        6,546   $         5,274   $   15,183   $ 64,122
THREE MONTHS ENDED JUNE 30, 2002 (RESTATED)
-------------------------------------------
Revenue                                      $    10,492  $          113   $            --   $       --   $ 10,605
Direct operating cost                              5,564             277                --           --      5,841
                                             -----------  ---------------  ----------------  -----------  ---------
Gross profit (loss)                                4,928            (164)               --           --      4,764
S,G&A                                              1,442             (25)               --          790      2,207
                                             -----------  ---------------  ----------------  -----------  ---------
Income (loss) from operations                      3,486            (139)               --         (790)     2,557
Interest (income)                                    231              --                --           (4)       227
Other income (expense)                                10               3                --          127        140
                                             -----------  ---------------  ----------------  -----------  ---------
Income (loss) before discontinued
operations and cumulative effect of
change in accounting principle                     3,265            (136)               --         (659)     2,470
Discontinued operations                               34              --              (303)          --       (269)
                                             -----------  ---------------  ----------------  -----------  ---------
Net Income (loss)                            $     3,299  $         (136)  $          (303)  $     (659)  $  2,201
                                             ===========  ===============  ================  ===========  =========
Depreciation, amortization, and
accretion                                    $     1,281  $           --   $           107   $       15   $  1,403
Capital Expenditures                         $       566  $           --   $           235   $       --   $    801
Total Assets                                 $    43,625  $       27,491   $         9,282   $    3,722   $ 84,170


                                             Operating    Non-Operating    Discontinued
                                             Disposal     Disposal         Processing and
                                             Facilities   Facilities       Field Services    Corporate    Total
SIX MONTHS ENDED JUNE 30, 2003
------------------------------
Revenue                                      $    22,736  $           55   $            --   $       --   $ 22,791
Direct operating cost                             11,811             229                --           --     12,040
                                             -----------  ---------------  ----------------  -----------  ---------
Gross profit (loss)                               10,925            (174)               --           --     10,751
S,G&A                                              3,657           1,801                --        2,328      7,786
                                             -----------  ---------------  ----------------  -----------  ---------
Income (loss) from operations                      7,268          (1,975)               --       (2,328)     2,965
Interest                                              38              --                --           99        137
Other Income (expense)                                29              64                --           --         93


                                        9
<PAGE>
Write off of Ward Valley facility                     --          20,951                --           --     20,951
                                             -----------  ---------------  ----------------  -----------  ---------
Income (loss) before income tax
and discontinued operations                        7,259         (22,862)               --       (2,427)   (18,030)
Income tax expense (benefit)                          --              --                --           55         55
Discontinued operations                            4,960              --            (2,029)          --      2,931
                                             -----------  ---------------  ----------------  -----------  ---------
Net Income (loss)                                 12,219         (22,862)           (2,029)      (2,482)   (15,154)
                                             ===========  ===============  ================  ===========  =========
Depreciation, amortization, and
accretion                                    $     3,793  $            2   $            --   $       20   $  3,814
Capital Expenditures                         $     4,063  $           23   $           451   $       --   $  4,537
Total Assets                                 $    37,119  $        6,546   $         5,274   $   15,183   $ 64,122
SIX MONTHS ENDED JUNE 30, 2002 (RESTATED)
-----------------------------------------
Revenue                                      $    23,849  $          180   $            --   $       --   $ 24,029
Direct operating cost                             11,436             580                --           --     12,016
                                             -----------  ---------------  ----------------  -----------  ---------
Gross profit (loss)                               12,413            (400)               --           --     12,013
S,G&A                                              4,096              55                --        1,597      5,748
                                             -----------  ---------------  ----------------  -----------  ---------
Income (loss) from operations                      8,317            (455)               --       (1,597)     6,265
Interest                                             441              --                --           40        481
Other income (expense)                                35            (487)               --          127       (325)
                                             -----------  ---------------  ----------------  -----------  ---------
Income (loss) before discontinued
operations and cumulative effect of
change in accounting principle                     7,911            (942)               --       (1,510)     5,459
Discontinued operations                              224              --              (704)          --       (480)
Cumulative effect of change in
accounting principle                         $    14,983  $        1,548   $        (3,390)  $       --   $ 13,141
                                             -----------  ---------------  ----------------  -----------  ---------
Net Income (loss)                            $    23,118  $          606   $        (4,094)  $   (1,510)  $ 18,120
                                             ===========  ===============  ================  ===========  =========
Depreciation, amortization, and
accretion                                    $     3,118  $          229   $           269   $       32   $  3,648
Capital Expenditures                         $     1,559  $           --   $           247   $       --   $  1,806
Total Assets                                 $    43,675  $       27,491   $         9,282   $    3,722   $ 84,170
</TABLE>

NOTE 5.   STOCK  OPTION  PLANS

The  Company  has  two  stock-based  compensation plans, which are accounted for
under  the  recognition  and  measurement  principles  of  APB  Opinion  No. 25,
Accounting  for  Stock  Issued  to  Employees  and  related  Interpretations. No
stock-based employee compensation cost is reflected in net income. The following
table illustrates the effect on net income and earnings per share if the Company
applied  the  fair  value  recognition  provisions  of  FASB  Statement No. 123,
Accounting  for  Stock-Based  Compensation,  to stock-based compensation for the
three  and  six  months  ended  June  30,  2003  and  2002:

<TABLE>
<CAPTION>
                                                                      Three Months Ended       Six Months Ended
                                                                  ------------------------  ----------------------
                                                                     2003         2002         2003        2002
                                                                  -----------  -----------  ----------  ----------
<S>                                                               <C>          <C>          <C>         <C>
Net income (loss), as reported                                    $    2,013   $    2,201   $ (15,154)  $  18,120
Deduct: Total stock-based employee compensation expense
determined under fair value based method for all awards, net of
related tax effects                                                     (121)        (164)       (630)       (236)
                                                                  -----------  -----------  ----------  ----------
Pro forma net income (loss)                                       $    1,892   $    2,037   $ (15,784)  $  17,884
                                                                  ===========  ===========  ==========  ==========

EARNINGS (LOSS) PER SHARE:
   Basic - as reported                                            $      .12   $      .14   $    (.94)  $    1.27
                                                                  ===========  ===========  ==========  ==========
   Basic - pro forma                                              $      .11   $      .13   $    (.98)  $    1.25
                                                                  ===========  ===========  ==========  ==========
   Diluted - as reported                                          $      .11   $      .12   $    (.94)  $    1.14
                                                                  ===========  ===========  ==========  ==========
   Diluted - pro forma                                            $      .11   $      .11   $    (.98)  $    1.12
                                                                  ===========  ===========  ==========  ==========
</TABLE>


                                       10
<PAGE>
The  stock option plan summary and changes during the three and six months ended
June  30  are  as  follows:

<TABLE>
<CAPTION>
                                                                    Three Months Ended        Six Months Ended
                                                                 ------------------------  ------------------------
                                                                    2003         2002         2003         2002
                                                                 -----------  -----------  -----------  -----------
<S>                                                              <C>          <C>          <C>          <C>
Options outstanding, beginning of period                          1,434,874      946,650      753,150    1,128,650
Granted                                                              55,000       50,000      813,724      130,000
Exercised                                                            (1,000)      (2,000)     (68,500)      (2,000)
Canceled                                                            (18,150)     (40,500)     (27,650)    (302,500)
                                                                 -----------  -----------  -----------  -----------
Options outstanding, end of period                                1,470,724      954,150    1,470,724      954,150
                                                                 ===========  ===========  ===========  ===========

Weighted average exercise price of options, beginning of period  $     4.03   $     3.39   $     3.42   $     2.90
Weighted average exercise price of options granted               $     2.60   $     3.92   $     4.30   $     3.16
Weighted average exercise price of options exercised             $     1.60   $     2.30   $     1.68   $     2.30
Weighted average exercise price of options canceled              $    10.13   $    12.17   $     7.72   $     2.45
Weighted average exercise price of options, end of period        $     3.90   $     3.08   $     3.90   $     3.08

Options exercisable at end of period                                902,681      844,150      865,831      844,150
                                                                 ===========  ===========  ===========  ===========

Options available for future grant at end of period                 416,776    1,108,350      416,776    1,108,350
                                                                 ===========  ===========  ===========  ===========
</TABLE>

The  following  table  summarizes  stock options outstanding under the Company's
option  plans  as  of  June  30,  2003:

<TABLE>
<CAPTION>
                        Weighted
                         average                       Weighted                      Weighted
                        remaining                       average                       average
Range of exercise   contractual life     Number     exercise price     Number     exercise price
price per share          (years)       outstanding     per share     exercisable     per share
------------------  -----------------  -----------  ---------------  -----------  ---------------
<S>                 <C>                <C>          <C>              <C>          <C>
1.00 - $1.47                      4.0      119,500  $          1.33      119,500  $          1.33
1.60 - $2.25                      6.7      128,000  $          1.98      128,000  $          1.98
2.42 - $3.50                      8.9      462,329  $          2.94      259,582  $          2.89
3.75 - $5.00                      7.8      532,884  $          4.30      296,346  $          4.14
6.50                              9.6      173,011  $          6.50       43,253  $          6.50
10.13                             0.9       55,000  $         10.13       55,000  $         10.13
                                       -----------                   -----------
                                         1,470,724                       901,681
                                       ===========                   ===========
</TABLE>

As  of  June  30,  2003,  the  1992  Stock Option Plan for Employees had options
outstanding  to  purchase  945,724  common  shares  with 92,926 shares remaining
available  for  issuance  under  option  grants.  The 1992 Stock Option Plan for
Directors had options outstanding to purchase 525,000 common shares with 360,700
shares  remaining available for issuance under option grants.  The fair value of
each option grant is estimated using the Black-Scholes option-pricing model with
the  following  weighted-average  assumptions  used  for grants during the three
months  ended  June  30  as  follows:

<TABLE>
<CAPTION>
                                                             2003        2002
                                                          ----------  ----------
<S>                                                       <C>         <C>
         Expected volatility                                     83%         80%
         Risk-free interest rates                              3.75%       4.75%
         Expected lives                                     10 years    10 years
         Dividend yield                                           0%          0%
         Weighted-average fair value of options granted
         during the quarter (Black-Scholes)               $    2.19   $    3.29
</TABLE>


                                       11
<PAGE>
NOTE 6.   INCOME TAXES

Income  tax  expense  differs  from  that calculated using applicable income tax
rates  to  pretax  income  due  primarily  to the presence of net operating loss
carryforwards  and  a  valuation  allowance.

The Company has historically recorded a valuation allowance for certain deferred
tax  assets  due  to  uncertainties  regarding  future operating results and for
limitations on utilization of acquired net operating loss carry forwards for tax
purposes.  The  realization  of a significant portion of net deferred tax assets
is  based  in  part  on  the  Company's  estimates of the timing of reversals of
certain  temporary  differences  and  on the generation of taxable income before
such  reversals.  During  2002,  the  Company reevaluated the deferred tax asset
valuation  allowance and determined it was "more likely than not" that a portion
of  the  deferred  tax  asset  would  be  realizable.  Consequently, the Company
decreased  the  portion  of  the  valuation  allowance  related to its operating
facilities.

The  Company's  net  operating  loss  ("NOL")  carry  forward  of  approximately
$30,699,000  at  December 31, 2002,  and $48,000,000 at June 30, 2003, begins to
expire  in  the  year  2006.

At  June  30,  2003,  the  Company has approximately $25,000,000 of deferred tax
assets  and  a  corresponding valuation allowance which reduces the net deferred
tax  asset  to  $8,284,000.  $8,284,000  represents  the expected utilization of
deferred  tax  assets  in  the  foreseeable  future.

On  March 26, 2003, the Company wrote off $20,951,000 in Ward Valley, California
disposal  site  development  costs  and  therefore  does  not  expect to realize
previously  estimated  taxable income in 2003. Management expects the $8,284,000
of  deferred  tax  asset  to  be  realized  in the years subsequent to 2003, and
therefore  classified  the  total net deferred tax asset as a long term asset on
its  balance  sheet.

NOTE 7.   LITIGATION

Significant  developments  have  occurred  on  the following legal matters since
December  31,  2002:

US ECOLOGY, INC. V. THE STATE OF CALIFORNIA, ET AL., CASE NO.GIC747562, SUPERIOR
---------------------------------------------------
COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF SAN DIEGO

In  May 2000, subsidiary US Ecology, Inc., sued the State of California, et. al.
("the  State")  for monetary damages exceeding $162 million. The suit stems from
the  State's abandonment of the Ward Valley low-level radioactive waste ("LLRW")
disposal project. California law requires the state to build a disposal site for
LLRW  produced  in  California,  Arizona,  North Dakota and South Dakota; member
states  of  the Southwestern Compact.  US Ecology was selected in 1985 to locate
and  license  the  site using its own funds on a reimbursable basis. In 1993, US
Ecology  obtained  a  license  from  the  State  and  entered  a  ground  lease.

The  State successfully defended the license against court challenges and, until
Governor  Gray  Davis  took office, actively pursued conveyance of the site from
the  federal  government.  In  September  2000,  the  Superior  Court  granted
California's motion to dismiss all causes of action, which the Company appealed.
In  September  2001, the California Fourth Appellate District Court remanded the
case  for  trial  on promissory estoppel grounds. The case was tried in Superior
Court  for  the  County  of  San  Diego  during  February  and  March  2003.

On  March  26,  2003,  the Superior Court issued a Statement of Decision finding
that  the  Company  failed  to establish causation and that its claim is further
barred by the doctrine of unclean hands. The latter finding was based on actions
the  Court  concluded  had created obstacles to an agreement between the federal
government  and  the  State  to  convey  the site. The Court also found that key
elements  of  the  Company's promissory estoppel claim had been proven at trial.
Specifically,  the  Court  ruled  that  the  State  made a clear and unambiguous
promise  to US Ecology in 1988 to use its best efforts to acquire the site, that
Governor  Davis'  administration  abandoned this promise, and that the Company's
reliance  on  the  State's  promise was reasonable and foreseeable. However, the
Court  found  that  the  State's  breach  of  its best efforts promise was not a
substantial factor in causing damages to US Ecology since the federal government
had  continued  to  resist  the  land  transfer.


                                       12
<PAGE>
Based  on  the  uncertainty  of  recovery  following  the  trial court's adverse
decision,  the Company wrote off the $20,951,000 deferred site development asset
at  March  31,  2003.

On May 2, 2003, the Company filed a motion to vacate and enter new judgment with
the  trial  court,  arguing that the March 26 decision misapplied the law to the
facts.  On May 30, 2003, this motion was denied without comment. On June 26, the
Company  filed  a notice of appeal with the California Fourth Appellate District
Court.

The  Company's  financial  interest  in  the pending claim against the State was
improved by an amendment to the November 13, 1998 Ward Valley Interest Agreement
and  Assignment  entered into by American Ecology and its former primary lender.
This  amendment,  entered  into  by the Company and the successor in interest to
that  lender on June 27, 2003, provides that any monetary damages obtained shall
first be allocated to the Company to recover past and future litigation fees and
expenses  relating  to  the  pending  claim.  Thereafter,  any  remaining amount
recovered  shall  be  divided equally between the Company and the former lender.
The  1998  agreement  had  provided that the first $29.6 million less up to $1.0
million  in legal fees and expenses would be owed to the former lender, with any
remaining  recovery  reserved  to  the  Company.

In  early  July,  the  Company engaged the law firm of Cooley Godward on a fixed
price  plus  contingency basis to pursue the appeal, paying the fixed fee at the
time  of  engagement.  A  briefing  schedule  has  not  been  set.

MANCHAK  V.  US  ECOLOGY,  INC., U.S. DISTRICT COURT FOR THE DISTRICT OF NEVADA,
--------------------------------
CIVIL  ACTION  NO.  96-494.

In March 1996, Frank Manchak, Jr. ("Plaintiff" or "Manchak") filed suit alleging
infringement  of  a  sludge treatment patent to stabilize hazardous waste at the
Company's  Beatty,  Nevada  hazardous  waste  disposal facility. Plaintiff seeks
unspecified  damages  for  infringement,  treble  damages,  interest,  costs and
attorney  fees.  On  October 17, 2002, the US District Court for the District of
Nevada  granted  the  Company's motion for summary judgment to dismiss the suit.
Manchak's  motion  for  reconsideration  was denied on January 8, 2003.  Manchak
appealed; however, plaintiff failed to timely file its appellant's brief and the
Company  moved  to  dismiss the appeal. On July 2, 2003, the US Court of Appeals
for  the  Federal  Circuit  granted  the Company's motion to dismiss, and denied
plaintiff's  request  for  an  extension of time and relief from page/word brief
limitations.  On  July 20, 2003 the plaintiff filed a motion for reconsideration
with the appellate court. In January 2003, the Company filed a motion to recover
legal fees and expenses. This motion was denied, which the Company is appealing.

ENTERGY  ARKANSAS,  INC.  ET  AL, CENTRAL INTERSTATE LOW-LEVEL RADIOACTIVE WASTE
--------------------------------------------------------------------------------
COMMISSION  AND  US  ECOLOGY,  INC. ("PLAINTIFFS") V. STATE OF NEBRASKA, ET AL.,
------------------------------------------------------------------------------
CASE NO. 4:98CV3411, U.S. DISTRICT COURT, DISTRICT OF NEBRASKA

This  action  was  brought  in  federal  court  in  December of 1999 by electric
utilities  that generate low-level radioactive waste ("LLRW") within the Central
Interstate  Low-Level  Radioactive  Waste  Compact  (CIC). CIC member states are
Nebraska,  Kansas,  Oklahoma,  Arkansas,  and  Louisiana.  The  action  seeks
declaratory  relief  and  damages  for  bad  faith  in  the  State of Nebraska's
processing  and ultimate denial of US Ecology's application to site, develop and
operate  a  LLRW disposal facility near Butte, Nebraska. US Ecology is the CIC's
contractor  and  developer.  The  CIC  was  originally  named as a defendant and
subsequently  realigned  as  a  plaintiff. US Ecology intervened as a plaintiff.

The  CIC sought to recover contributions made by the utilities and US Ecology to
the  CIC  for  pre-licensing  project  costs  in  the approximate amounts of $95
million  and  $6.2  million,  respectively, and removal of the State of Nebraska
from  the  licensing  process.  The Eighth Circuit Court of Appeals subsequently
dismissed  the  utilities'  and US Ecology's independent claims against Nebraska
for  breach  of  the  good faith provision of the Compact, and for denial of due
process  based on sovereign immunity.  The utilities and US Ecology subsequently
filed  cross claims against the CIC for breach of contract and the imposition of
a  constructive  trust.


                                       13
<PAGE>
On  September  30,  2002,  the  US  District  Court for the District of Nebraska
entered  judgment  against  Nebraska  in  favor  of  the  CIC  for $153 million,
including  approximately  $50 million for prejudgment interest.  Of this amount,
US  Ecology's share was for a $6.2 million contribution and $6.1 for prejudgment
interest.  The  $6.2  million  contribution is included within the balance sheet
amount  of  $6,478,000 of capitalized facility development costs. The Court also
dismissed  the  utilities'  and US Ecology's cross claims for breach of contract
and  imposition of a constructive trust, finding that it was premature to decide
the  merits  of these claims and leaving the question open for future resolution
if  necessary.  The  State  appealed the judgment to the Eighth Circuit Court of
Appeals.

The  case was argued before the Eight Circuit on June 12, 2003. No assurance can
be  given  that the trial court's decision will be affirmed on appeal or that US
Ecology  will  recover  its  contributions  or  interest  thereon.

MATTIE  CUBA,  ET AL. V. AMERICAN ECOLOGY ENVIRONMENTAL SERVICES CORPORATION, ET
--------------------------------------------------------------------------------
AL.,CAUSE NO. 2000-092, 4TH JUDICIAL DISTRICT COURT, RUSK COUNTY, TEXAS
----

This  suit  was  brought  in  November  2000  by 28 named plaintiffs against the
Company  and  named  subsidiaries, the former owners and approximately 60 former
customers  of  its Winona, Texas facility. Plaintiffs seek recovery for personal
injuries,  property  damages  and  exemplary  damages based on negligence, gross
negligence,  nuisance  and  trespass.  The  Company  filed  a motion for summary
judgment  in  July  2002  based on lack of evidence. In November 2002, the trial
court  granted partial summary judgment, dismissing certain causes of action and
reducing  the  number  of plaintiffs, but preserving other causes of action. The
Company  subsequently  filed  a  motion  for  summary judgment seeking dismissal
against all of the adult plaintiffs on statute of limitations grounds.  On March
26,  2003  the  court  granted  this  motion and dismissed the adult plaintiffs.
Seven  minors  and  one  intervenor  remain  party  to  the lawsuit. The Company
believes  plaintiffs'  remaining  case  is  without  merit  and will continue to
vigorously  defend  the matter.  No assurance can be given that the Company will
prevail  or  that  the  matter  can be favorably resolved. The Company's current
insurance  carrier is paying for defense of this matter subject to the Company's
$250,000  deductible,  which  has  been  fully  accrued  in  prior  periods.

NOTE 8.   COMMITMENTS AND CONTINGENCIES

Effective  January  1,  2003,  the  Company  established  the  American  Ecology
Corporation  Management  Incentive  Plan.  The  Plan  provides  for  selected
participants  to  receive  bonuses  based  on  pre-tax  operating income levels.
Bonuses  under  the  plan are to be paid out over three years with maximum bonus
payments  in  any  one  year  of  $1,125,000 if pre-tax operating income exceeds
$12,000,000.

In  February  2003, the Company entered into employment agreements with four key
executive  employees.  The  agreements  expire  December  31, 2004 and 2005, and
provide  for  aggregate  minimum  annual  salaries  of  $639,000.

On  May  21, 2003, the Company met with representatives of the insurance company
that  provides  closure/post  closure  insurance  to discuss policy renewal. The
Company's  current  set of primary financial assurance policies expire September
27,  2003. To address risk-related concerns raised by the insurance carrier, the
Company  is  proposing  to  increase  collateral  from  the $1,150,000 currently
provided  through  a  standby  letter of credit to $4,000,000 over the next five
years,  primarily in cash.  The Company expects the insurance company to respond
to  the  proposal  in August, 2003. No assurance can be given that the Company's
proposal  will  be  accepted or that higher collateral amounts will be required.

NOTE 9.   ACCOUNTING CHANGES AND RESTATEMENT

Effective  January  1,  2002,  the  Company  implemented  Statement of Financial
Accounting Standards No. 143, "Accounting for Asset Retirement Obligations" (FAS
143)  under  the  early adoption provisions.  FAS 143 requires a liability to be
recognized  as part of the fair value of future asset retirement obligations and
an  associated  asset  to  be  recognized  as part of the carrying amount of the
underlying  asset.  Previously  the  Company recorded a closure and post closure
obligation  for  the  pro-rata amount of space used of the total permitted space
available.  On  January 1, 2002, in accordance with FAS 143, this obligation was
valued at the current closure cost, increased by a cost of living adjustment for
the  estimated  time  of  payment,  and  discounted  back  to its present value.

In  further  accordance  with  FAS 143, upon calculation of the asset retirement
obligation  the  Company  also  recorded  an associated asset for the retirement


                                       14
<PAGE>
obligation.  This  asset  is  amortized  over  the  estimated useful life of the
related  long-lived  asset. FAS 143 allows for the aggregation of certain assets
in calculating and subsequently amortizing this asset. During the fourth quarter
of  2002,  the  Company  reassessed  its  methodology  of  applying  FAS 143 and
disaggregated  certain  individual facility assets. In recalculating the overall
asset under the revised methodology, the Company recorded a $3,182,000 reduction
with  no  corresponding  change  in  the  recorded  liability. Consequently, the
initial  2002  gain on implementation of the new accounting standard recorded in
the  first  quarter  of  2002  was  reduced  by $3,182,000, and the amortization
associated  with  the asset was reduced from what was previously recorded during
the  first  three  quarters  of  2002.  The  following restatements were made to
account  for  this  change in FAS 143 implementation methodology (in thousands):

<TABLE>
<CAPTION>
                                           3 Months Ending    Six Months Ending
                                            June 30, 2002       June 30, 2002
                                           ----------------  -------------------
<S>                                        <C>               <C>
Reported Net Income                        $          2,175  $           21,252
Effect of Restatement:
   Cumulative Effect of Accounting Change                --              (3,182)
   Amortization                                          26                  50
                                           ----------------  -------------------
Restated Net Income                        $          2,201  $           18,120
                                           ================  ===================

Reported Diluted EPS                       $            .12  $             1.34
Effect of Restatement:
   Cumulative Effect of Accounting Change                --                (.20)
   Amortization                                          --                  --
                                           ----------------  -------------------
Restated EPS                               $            .12  $             1.14
                                           ================  ===================
</TABLE>

NOTE 10.  CLOSURE AND POST CLOSURE OBLIGATIONS

Closure and post closure obligations are recorded when environmental assessments
and/or  remedial efforts are probable, and the costs can be reasonably estimated
consistent  with  Statement of Financial Accounting Standards No. 5. The Company
performs  periodic  reviews  of  both non-operating and operating facilities and
revises  accruals  for  estimated post-closure, remediation and other costs when
necessary.  The  Company's  recorded  liabilities are based on best estimates of
current  costs  and are updated periodically to reflect current technology, laws
and  regulations,  inflation  and  other  economic factors.  Changes to reported
closure and post closure obligations were as follows (in thousands):

<TABLE>
<CAPTION>
                                 Accrued Closure and      Closure Obligation of Assets    Total Closure and Post
                               Post Closure Obligation      Held for Sale or Closure       Closure Obligations
                              -------------------------  ------------------------------  ------------------------
<S>                           <C>                        <C>                             <C>
December 31, 2002 obligation  $                 10,200   $                       6,560   $                16,760
Accretion of obligation                            477                              65                       542
Payment of obligation                             (449)                             --                      (449)
Adjustment of obligation                           133                          (1,107)                     (974)
                              -------------------------  ------------------------------  ------------------------
June 30, 2003 obligation      $                 10,361   $                       5,498   $                15,859
                              =========================  ==============================  ========================
</TABLE>

On February 13, 2003, the Company sold substantially all of the assets of the El
Centro  landfill. The sale included transfer of the accrued landfill closure and
post closure obligation, which was $1,107,000 at the date of the sale.

At  June  30,  2003,  $244,000  of  pledged  cash and investment securities were
legally  restricted.  The  pledged cash has been set aside to settle any closure
and post closure obligations that are not directly paid by the Company.

NOTE 11.  OPERATING LEASE BUY OUT

On  August  3,  2000,  the  Company entered into a $2,000,000 equipment sale and
leaseback transaction based on the sale of specified equipment and rolling stock
to  a  third  party lessor. The Company received $2,000,000 in proceeds from the
asset  sale  and  entered  into  an operating lease for the use of the equipment
beginning  August  8,  2000 with monthly payments scheduled through September 8,
2006.  The Company realized a $1,098,000 gain on the sale of the equipment to be
amortized  over  the  life  of  the  lease.


                                       15
<PAGE>
On  March  28, 2003 the Company exercised an early buyout of the operating lease
for  $1,159,000  and  recorded equipment purchases with a book value of $702,000
along with a reduction in the deferred gain of $457,000. In conjunction with the
early  buyout,  the Company recorded an impairment charge of $225,000 on certain
equipment  at  the  discontinued  Oak  Ridge  facility.

NOTE 12.  DISCONTINUED OPERATIONS

As  of  June  30,  2003,  "Assets held for sale or closure" consisted of certain
assets  at  the  El  Centro municipal waste disposal facility, which the Company
sold  to  a wholly-owned subsidiary of Allied Waste Industries, Inc. on February
13,  2003,  and  the  assets  and  liabilities  of  the  discontinued  Oak Ridge
processing  and  field  services  operations  classified  as  "Held  for sale or
closure".  Accordingly,  the  revenue, costs and expenses and cash flows for the
El  Centro  landfill and Oak Ridge processing and Field Services operations have
been  excluded from continuing operations results and reported as "Income (loss)
from  discontinued  operations"  and "Net cash used by discontinued operations".
Prior  periods  have  been  restated to reflect the discontinued operations. The
assets  and  liabilities  of  discontinued  operations  included  within  the
consolidated  balance  sheet  as of June 30, 2003 are as follows (in thousands):

<TABLE>
<CAPTION>
                                      Processing and Field   El Centro Disposal    Total Assets Held
                                        Services Facility         Facility        for Sale or Closure
                                      ---------------------  -------------------  --------------------
<S>                                   <C>                    <C>                  <C>
Current assets
--------------
    Current assets                    $               3,166  $               350  $              3,516
    Property & equipment, net                           552                   --                   552
                                      ---------------------  -------------------  --------------------
                                                      3,718                  350                 4,068
                                      =====================  ===================  ====================
Non-current assets
------------------
    Property, plant & equipment, net                  1,509                   --                 1,509
    Other                                                48                  682                   730
                                      ---------------------  -------------------  --------------------
                                                      1,557                  682                 2,239
                                      =====================  ===================  ====================
Current liabilities
-------------------
    Accounts payable & accruals                       5,252                    6                 5,258
    Current portion long term debt                       64                   --                    64
                                      ---------------------  -------------------  --------------------
                                                      5,316                    6                 5,322
                                      =====================  ===================  ====================
Non-current liabilities
-----------------------
    Closure/post closure obligations                  5,517                   --                 5,517
    Long-term debt                                       44                   --                    44
    Other                                                10                   --                    10
                                      ---------------------  -------------------  --------------------
                                                      5,571                   --                 5,571
                                      =====================  ===================  ====================
</TABLE>

Operating  results for the discontinued operations were as follows for three and
six  months  ending  June  30:

<TABLE>
<CAPTION>
                                     Processing and Field    El Centro Disposal    Total Discontinued
($in thousands)                      Services Operations          Facility             Operations
                                    ----------------------  --------------------  --------------------
<S>                                 <C>                     <C>                   <C>
Three Months Ending June 30, 2003
---------------------------------
Revenues, net                       $               1,240   $                --   $             1,240
Operating income (loss)                              (690)                   (3)                 (693)
Net income (loss)                                    (692)                   16                  (676)
Basic earnings (loss) per share                      (.04)                   --                  (.04)
Diluted earnings (loss) per share                    (.04)                   --                  (.04)

Three Months Ending June 30, 2002
---------------------------------
Revenues, net                       $               5,579   $               597   $             6,176
Operating income (loss)                              (214)                  139                   (75)
Net income (loss)                                    (303)                   34                  (269)
Basic earnings (loss) per share                      (.02)                   --                  (.02)
Diluted earnings (loss) per share                    (.02)                   --                  (.02)


                                       16
<PAGE>
Six Months Ending June 30, 2003
-------------------------------
Revenues, net                       $               2,019   $               469   $             2,488
Operating income (loss)                            (1,793)                   74                (1,719)
Net income (loss)                                  (2,029)                4,960                 2,931
Basic earnings (loss) per share                      (.12)                  .30                   .18
Diluted earnings (loss) per share                    (.12)                  .30                   .18

Six Months Ending June 30, 2002
-------------------------------
Revenues, net                       $               9,913   $             1,216   $            11,129
Operating income (loss)                              (479)                  295                  (184)
Net income (loss)                                    (704)                  224                  (480)
Basic earnings (loss) per share                      (.05)                  .02                  (.03)
Diluted earnings (loss) per share                    (.05)                  .02                  (.03)
</TABLE>


El  Centro  Disposal  Facility.  On  February  13, 2003, the Company sold the El
------------------------------
Centro  municipal  and industrial waste landfill to a subsidiary of Allied Waste
Industries,  Inc.  ("Allied")  for  $10  million  cash  at  closing  and  future
volume-based  royalty payments. Under the Agreement, Allied will pay the Company
minimum  royalties  of  at  least  $215,000  annually.  Once Allied has paid the
Company  $14,000,000  in royalties, it no longer has an obligation to pay annual
minimum  royalties,  but  will  still  be  required to pay royalties if disposal
volumes  exceed  a  minimum  volume  threshold.  The Purchase Agreement provides
incentives  for  Allied to bring Texas Class 1 industrial waste to the Company's
adjacent  hazardous waste facility, and for the Company to utilize the El Centro
landfill.

The  Company  sold  $7,047,000  of  Property  and  equipment  in  exchange  for
$10,000,000  of Cash, royalties valued at $858,000, and the assumption by Allied
of  $1,098,000  of  closure liabilities.  A gain of $4,909,000 was recognized in
discontinued  operations  related  to  this  sale.

The  royalties,  valued  at  $858,000, represent the present value of 5 years of
minimum  royalty  payments.  Annual  payments  in excess of $215,000 or payments
subsequent  to  2007  would  be  included  in  Other income at the time of their
receipt.   This  royalty  represents substantially all of the assets held by the
discontinued  El  Centro  disposal  facility.

While  the El Centro disposal facility is currently classified as a discontinued
operation, royalty payments are expected to be received for at least five years.
After  fiscal  year 2003 the El Centro disposal facility should realize interest
income  and other income from the royalty payments which would not be classified
as  discontinued  operations  due  to  their  recurring  nature.

For  segment  reporting  purposes,  El  Centro  landfill  operating results were
previously  classified  as  "Operating  Disposal  Facilities".

Oak  Ridge  Processing  Facility  and  Field Services.  During 2002, the Company
-----------------------------------------------------
offered  for  sale  its  LLRW  Processing Facility and Field Services operations
based  in Oak Ridge, TN, but was unable to consummate a sale based on continuing
commercial operations. On December 27, 2002, the Company discontinued commercial
waste  processing.  Since that time, the Company has devoted its primary efforts
to  removing  accumulated  waste  from  the facility to prepare the facility for
sale.  Removal of all customer waste from the facility was completed during July
2003.  The  majority had been shipped off site for processing and disposal as of
June  30,  2003. Detailed information on the exact amount and character of waste
removed  at  the  time  of shipment was used to refine initial waste disposition
cost estimates. This resulted in an additional accrual of $911,000 for the three
months  ending  March  31,  2003 and an additional $465,000 for the three months
ending  June  30,  2003.

On  June 16, 2003, the Company formally began discussions with a potential buyer
of the Oak Ridge facility. A non-binding letter of intent has been entered into,
based  on sale of the facility's assets, including licenses, for a nominal sales


                                       17
<PAGE>
price  along  with  buyer  assumption  of  specified  liabilities.  The  sale is
contingent  upon  numerous  items  of  which  a  satisfactory  radiological
characterization  of  the  facility  is  a  primary  consideration.  There is no
assurance  that the Company will be able to sell the Oak Ridge facility on terms
favorable  to  the  Company.

On  March  28,  2003,  the  Company  recorded an additional impairment charge of
$225,000  on  certain  Oak Ridge equipment acquired under the early buyout of an
operating  lease.

On  December  27,  2002,  management  informed  all Oak Ridge employees that the
Company  was  discontinuing  commercial processing at the Oak Ridge facility and
implemented  a  substantial  reduction in the facility's labor force. Terminated
union  employees  were  compensated  for prior service, provided health coverage
through  January  31,  2003,  and  presented  with a proposed severance package.
Terminated  non-union  employees  were paid severance in accordance with written
Company policy. For employees covered under the collective bargaining agreement,
the  Company  entered  into  good  faith  severance  negotiations  with  union
representatives.  The  Company  met  on  several  occasions  with  the  union to
negotiate  severance.  Both  sides amended their original proposals during these
negotiations  with  a  severance package being accepted in principle on July 12,
2003.  On  July  16, 2003, a final written agreement was executed which provides
$152,000  of  severance to the terminated union employees and a release from all
claims  related  to  their  employment  with  the  Company.


Costs  incurred  at  the  Oak  Ridge  facility  to  remove waste and prepare the
facility  for  sale  during  the  three  and  six months ended June 30, 2003 are
summarized  as  follows:  (in  thousands  $000)

<TABLE>
<CAPTION>
                                                              Three Months   Six Months
                                                              -------------  -----------
<S>                                                           <C>            <C>
Net operating costs in excess of previous accrual             $         227  $       428
Additional impairment of property and equipment                          --          225
Increase in estimated cost for disposal of waste at facility            465        1,376
                                                              -------------  -----------

Disposal costs for the period ended June 30, 2003             $         692  $     2,029
                                                              =============  ===========
</TABLE>

Cost  changes for Oak Ridge facility on-site activities and disposal liabilities
for  removed  wastes  are  as  follows:

<TABLE>
<CAPTION>
($in thousands)                  December 31, 2002  Cash Payments   Adjustments  June 30, 2003
                                 -----------------  --------------  -----------  -------------
<S>                              <C>                <C>             <C>          <C>
Waste disposal liability                     1,827         (1,301)        3,703          4,229
On-site discontinued operation
  cost liability                             1,800         (1,509)          428            719
</TABLE>

The  Adjustments  represent  differences  between the estimated costs accrued at
December  31,  2002  and  the  actual  costs incurred during 2003 and changes in
estimated  future  costs for waste disposal. The Adjustments amount in the above
rollforward  is  different  from the Income statement amount due to discontinued
operations  revenue  realized  by  the  Company upon disposal of customer waste.

NOTE 13.  FACILITY DEVELOPMENT COSTS

The  Company  is  involved  in litigation requiring estimates of timing and loss
potential  whose  disposition  is controlled by the judicial process. During the
quarter  ended March 31, 2003, the Company wrote off its entire $20,951,000 Ward
Valley deferred site development asset following an adverse trial court decision
which  cast substantial doubt on the Company's ability to recover its investment
in  the  project. The decision to accrue costs or write off assets is based upon
the  specific  facts  and circumstances pertaining to each case and management's
evaluation  of  present  circumstances.  See  Note  7.

The  Company continues to believe that the facility development costs which were
capitalized  for  development  of the proposed Butte, Nebraska disposal facility
will  be  realized,  although  no  assurance can be given that a favorable trial
court  decision  will  be  affirmed  on  appeal.  See  Note  7.


                                       18
<PAGE>
NOTE 14.  SUBSEQUENT EVENTS

On  July 7, 2003 the Company received a check for $645,000 of a $740,000 federal
income  tax  receivable.  The  remaining  income  tax receivable of $95,000 plus
additional  accrued  interest  is  still  in  the  refund  process.

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

This document contains forward-looking statements that involve known and unknown
risks  and  uncertainties  which  may  cause actual results in future periods to
differ materially from those indicated herein.  These risks include, but are not
limited to, the ability to sell Oak Ridge processing facility assets, compliance
with  and  changes  to  applicable  laws,  regulations  and permits, exposure to
litigation, access to capital, access to insurance and financial assurances, new
technologies,  competitive  environment,  labor  disputes,  general  economic
conditions,  and  loss  or  diminution of major contracts. The Form 10-K for the
year  ending  December 31, 2002 contains additional risk factors and an expanded
disclosure  of  these  risks.  When  the  Company uses words like "will", "may,"
"believes," "expects," "anticipates," "should," "estimates," "project," "plans,"
their  opposites  and similar expressions, the Company is making forward-looking
statements.  These  terms are most often used in statements relating to business
plans,  strategies,  anticipated  benefits  or projections about the anticipated
revenues,  earnings or other aspects of our operating results. The Company makes
these statements in an effort to keep stockholders and the public informed about
our  business  based  on  management's current expectations about future events.
Such  statements  should be viewed with caution and are not guarantees of future
performance  or  events.  As  noted  elsewhere  in  this report, our business is
subject  to uncertainties, risks and other influences, many of which the Company
has  no  control  over.  Additionally,  these  factors,  either  alone  or taken
together,  could  have a material adverse effect on the Company and could change
whether  any  forward-looking  statement  ultimately  turns  out to be true. The
Company  undertakes  no  obligation  to publicly release updates or revisions to
these  statements.  The  following discussion should be read in conjunction with
the  audited  consolidated  financial  statements and the notes thereto filed on
Form  10-K  for  the  year  ending  December  31,  2002.

Unless otherwise described, changes discussed relate to the increase or decrease
from  the  three  and  six month period ended June 30, 2002 to the three and six
month  period  ended  June  30,  2003.

INTRODUCTION
------------

The  Company  is  a  hazardous, PCB, industrial and radioactive waste management
company  providing transportation, treatment and disposal services to commercial
and  government  entities  including,  but  not limited to nuclear power plants,
petro-chemical  refineries,  steel  mills,  the  U.S.  Department  of  Defense,
biomedical  facilities,  universities and research institutions. The majority of
its  revenues  are derived from fees charged for use of the Company's four fixed
waste  disposal  facilities.  The  Company  and  its  predecessors  have been in
business  for  51  years.

OVERALL  COMPANY  PERFORMANCE
-----------------------------

The  Company's financial performance for the three and six months ended June 30,
2003  was  weaker than the first and second quarters of 2002. Quarter to quarter
comparisons  are  affected  by  a single large project undertaken in early 2002,
higher  2003  litigation  expenses,  costs  related  to  discontinuation  of the
Company's  Oak Ridge, Tennessee low-level radioactive waste processing and field
services  business,  a  significant  gain  on  sale of assets in early 2003, and
changes  in  accounting  to  comply  with  recently  issued Financial Accounting
Standards.  These  factors  are  further  discussed  below.

Ward  Valley  Litigation  Expenses:  Due  to  the adverse California state court
----------------------------------
decision  on  March  26,  2003,  the  Company  wrote off $20,951,000 of facility
development costs for the Ward Valley project. This is reported as Loss on write
off  of  Ward Valley facility development costs in the Consolidated Statement of
Operations.  Litigation  and related costs totaling $288,000 and $1,786,000 were
incurred  and  included  in  SG&A during the three and six months, respectively,
ending  June  30,  2003.  The  Company  has appealed the Ward Valley ruling, but
expects  the  appeal  cost  to  be  minimal  based  on  a  fixed  price  legal
representation  agreement  entered  in  July,  2003  for  the  appeal.


                                       19
<PAGE>
Army  Corps  of  Engineers Fort Greely, Alaska Project:  The Company performed a
-------------------------------------------------------
$3,850,000  waste  packaging and disposal project during the quarter ended March
31,  2002  which  represented  29%  of  first  quarter 2002 revenues. This large
project was not replaced by like business in the first quarter of 2003.

FAS 143: The Company implemented FAS 143 on January 1, 2002.  FAS 143 requires a
--------
liability  to be recognized as part of the fair value of future asset retirement
obligations  and  an  associated  asset to be recognized as part of the carrying
amount  of  the  underlying  asset.  The implementation of FAS 143 resulted in a
$13,141,000  cumulative effect of change in accounting principle gain during the
quarter  ended  March  31,  2002.

Sale  of  El  Centro:  On  February  13,  2003,  the  Company sold the El Centro
---------------------
municipal  waste  landfill  to  Allied Waste and recognized a $4,909,000 gain on
sale. This gain was included in discontinued operations during the quarter ended
March  31,  2003.

Oak  Ridge  Disposal  Plan:  On  December  27,  2002,  the  Company discontinued
---------------------------
operations  at  the  Oak  Ridge facility and recognized $7,018,000 of additional
estimated costs required under its asset and liability disposal plan. During the
three  and six months ended June 30, 2003, the Company identified or incurred an
additional  $692,000  and  $2,029,000, respectively, in costs required to remove
accumulated  waste  from  the  facility  and prepare the facility for sale. This
primarily  reflects  more accurate information on the specific quantity and type
of  waste which became available when specific wastes were prepared for shipment
to  off-site  service  providers.

A significant portion of the Company's revenue is attributable to discrete waste
clean-up  projects ("Event Business").  The project-specific nature of the Event
Business  necessarily  creates  variability  in  revenue  and earnings. This can
produce  large quarter to quarter swings, depending on the relative contribution
from  Event  Business. Management's strategy is to expand its recurring customer
business  ("Base  Business")  while simultaneously securing both large and small
event  projects.  Management believes that by structuring its operating costs so
that  the Company's Base Business covers fixed costs, much of the Event Business
revenue  will  fall through to the bottom line. This strategy takes advantage of
the  high  fixed  cost  nature  of  the  disposal  business.

CRITICAL  ACCOUNTING  POLICIES
------------------------------

In  preparing  the  financial  statements,  management  makes many estimates and
assumptions  that  affect  the  Company's  financial  position  and  results  of
operations.  Disposal  Facility  Accounting,  Accounting  for  Discontinued
Operations,  Litigation, Income Taxes, and Project Accounting involve subjective
judgments,  estimates  and  assumptions  that  would likely produce a materially
different  financial  position  and  result of operation if different judgments,
estimates, or assumptions were used. These matters are discussed below.

DISPOSAL  FACILITY  ACCOUNTING

In  general  terms,  a  disposal  cell  development asset exists for the cost of
building  usable  disposal  space  and  a  closure liability exists for closing,
maintaining  and  monitoring  the disposal unit once this space has been filled.
Major  assumptions  and  judgments used to calculate cell development assets and
closure  liabilities  are  as  follows:

-    Personnel  and  equipment  costs  incurred  to construct disposal cells are
     capitalized  as  a  cell  development  asset.

-    The  cell  development  asset  is amortized as each available cubic yard of
     disposal  space  is  filled.  Periodic  independent engineering surveys and
     inspection  reports  are  used to determine the remaining volume available.
     These  reports  take  into account waste volume, compaction rates and space
     reserved  for  capping  filled  cells.

-    The closure liability is the present value based on a current cost estimate
     prepared by an independent engineering firm of the costs to close, maintain
     and  monitor  filled  disposal  units.  Management  estimates the timing of
     payment and then accretes the current cost estimate by an estimated cost of
     living (1.5%), and then discounts (9.3%) the accreted current cost estimate
     back  to  a  present value. The final payments of the closure liability are
     estimated  as  being paid in 2056 based upon current permitted capacity and
     estimated  annual  usage.

ACCOUNTING FOR DISCONTINUED OPERATIONS
Accounting  for discontinued operations requires numerous subjective and complex
judgments,  estimates  and  assumptions that materially affect financial results
and  position  of  discontinued  operations.


                                       20
<PAGE>
At  December  27,  2002,  the  Company  discontinued  operation  of  its  former
Processing  and  Field  Services  segment  in Oak Ridge, Tennessee facility. The
discontinued  operations  were  accounted  for  under Emerging Issues Task Force
Issue  No  94-3  Liability Recognition for Certain Employee Termination Benefits
and  Other  Costs  to  Exit  an  Activity (including Certain Costs Incurred in a
Restructuring), which requires a liability to be recognized at the time that the
decision  to  exit  the  segment  was  made. EITF 94-3 was chosen as the guiding
literature  rather  than  Statement  of  Financial  Accounting Standards No. 146
Accounting  for  Costs  Associated  with  Exit or Disposal Activities (FAS 146),
which  requires  a  liability to be recognized at the time that the liability is
incurred.  FAS  146  is required for exit activities entered into after December
31,  2002  and  was  optional  for  exit  activities prior to December 31, 2002.
Approximately  $1,800,000  of liabilities was recognized as of December 31, 2002
under  EITF  94-3  that  would  not  have been recognized until incurred had the
Company  adopted  FAS  146  prior  to  December  27,  2002.

The  Company  has  recognized $692,000 and $1,804,000 in incremental liabilities
and  $0  and $225,000 for impairment of equipment as of the three and six months
ending June 30, 2003, respectively, relating to discontinuation of its Oak Ridge
LLRW  Processing  and  Field  Services  operations.  The  Oak Ridge facility was
cleared  of  remaining customer waste in July 2003. Due to the ongoing status of
efforts  to  prepare  the facility for sale, the cost estimate for exit from the
segment  may  change,  potentially  by  a  material  amount.

LITIGATION

The  Company  is  involved  in litigation requiring estimates of timing and loss
potential  whose  disposition  is controlled by the judicial process. During the
quarter  ended  March  31,  2003,  the  Company  wrote off $20,951,000 due to an
adverse  trial  court  decision  which  cast  substantial doubt on the Company's
ability  to  recover  its investment in the Ward Valley project. The decision to
accrue  costs  or  write  off  assets  is  based  upon  the  specific  facts and
circumstances  pertaining  to  each  case and management's evaluation of present
circumstances.

INCOME  TAXES

The Company has historically recorded a valuation allowance against its deferred
tax  assets  in  accordance with FAS 109, Accounting for Income Taxes. This past
valuation  allowance  reflected management's belief that due to a history of tax
losses  and  the  previously  weak  financial  condition  and  prospects for the
business,  it would likely not utilize portions of the deferred tax assets prior
to  their  expiration.  The  valuation  allowance  is  based  on  management's
contemporaneous  evaluation  of  whether  it  is  more  likely than not that the
Company  will be able to utilize some, or all of the deferred tax assets. During
2002,  the  Company  assessed the valuation allowance and reversed approximately
$8,284,000  of  the  valuation allowance that the Company expected to utilize in
the  foreseeable  future.  During  the  three  months  ended March 31, 2003, the
Company  reclassified the entire net deferred tax asset as long term, given that
no  taxable income is expected during 2003 due to the impact of the write off of
the  Ward  Valley  Project.

PROJECT  ACCOUNTING

The  Company  has  performed  relatively  large,  fixed  fee  and  long-duration
remediation projects through the Company's discontinued Oak Ridge Field Services
Division.  Securing  contracts  to  perform  work  required  the Company to make
assumptions  regarding  job  duration,  percentage  of  completion  for  waste
processing,  and disposal costs that would not be known until the actual project
was  complete.  Differences between estimated and actual cost to remove, process
and  arrange  final disposal of contaminated material can vary widely, resulting
in  potentially  significant changes in individual project profit or loss. As of
June  30, 2003, the Company is awaiting final payment on a Field Service project
completed  earlier in the year. Although no remediation work remains, completion
of several contract requirements may positively or negatively impact the results
of  discontinued  operations.

RESULTS  OF  OPERATIONS
-----------------------


The  following table presents, for the periods indicated, the operating costs as
a percentage of revenues in the consolidated income statement:


                                       21
<PAGE>
<TABLE>
<CAPTION>
                                                   Three Months Ended                     Six Months Ended
                                        ------------------------------------  ---------------------------------------
                                                              (Restated)                              (Restated)
($in 000's)                               June 30, 2003      June 30, 2002       June 30, 2003       June 30, 2002
                                        -----------------  -----------------  -------------------  ------------------
                                           $        %         $        %          $         %         $         %
                                        -------  --------  -------  --------  ---------  --------  --------  --------
<S>                                     <C>      <C>       <C>      <C>       <C>        <C>       <C>       <C>
Revenue                                  12,020             10,605              22,791              24,029
Direct operating costs                    6,056     50.4%    5,841     55.1%    12,040      52.8%   12,016      50.0%
                                        -------            -------            ---------            --------

Gross profit                              5,964     49.6%    4,764     44.9%    10,751      47.2%   12,013      50.0%
SG & A                                    3,289     27.4%    2,207     20.8%     7,786      34.2%    5,748      23.9%
                                        -------            -------            ---------            --------

Income from operations                    2,675     22.3%    2,557     24.1%     2,965      13.0%    6,265      26.1%

Investment income                            22      0.2%       16      0.2%        22       0.1%       27       0.1%
Interest expense                             38      0.3%      243      2.3%       159       0.7%      508       2.1%
Loss on write off of Ward Valley             --      0.0%       --      0.0%    20,951      91.9%       --       0.0%
Other income (expense)                       93      0.8%      140      1.3%        93       0.4%     (325)     -1.4%
                                        -------            -------            ---------            --------

Net income (loss) before income
taxes                                     2,752     22.9%    2,470     23.3%   (18,030)    -79.1%    5,459      22.7%
Income tax expense                           63      0.5%       --      0.0%        55       0.2%       --       0.0%
                                        -------            -------            ---------            --------

Net income (loss) before discontinued
operations and cumulative effect of
accounting change                         2,689     22.4%    2,470     23.3%   (18,085)    -79.4%    5,459      22.7%
                                        =======            =======            =========            ========
</TABLE>


COMPARISON OF THREE MONTHS ENDED JUNE 30, 2003 AND 2002
-------------------------------------------------------

REVENUE
-------

For  the  three  months  ended  June 30, 2003, the Company reported consolidated
revenue  of  $12,020,000,  a  13% increase from the $10,605,000 reported for the
same  period  in  2002.  During  the three months ending June 30, 2003 and 2002,
$3,702,000  and 742,000 or 31% and 7% of revenue, respectively, represented work
performed  under  contract  with  the U.S. Army Corps of Engineers. The Corps of
Engineers  and other federal agencies continue to ship waste under this contract
to the Company's Grand View, Idaho treatment and disposal facility.

Operating  Disposal  Facilities
-------------------------------
The Richland, Washington LLRW disposal facility's revenue increased $745,000 for
the  three months ended June 30, 2003 from the same period in 2002. The increase
in  revenue  was  primarily due to disposal of a relatively high radiation level
shipment  during  June  2003.  While  a  significant  portion  of  the  Richland
facility's  revenue  is  fixed  due  to its regulated rate structure, during the
fourth  quarter  of 2002 the Company hired an experienced salesperson to improve
unregulated  revenues  at  the  site.  Second  quarter 2003 unregulated revenues
increased  $174,000  to $305,000 from first quarter 2003 unregulated revenues of
$131,000.

At  the Grand View, Idaho disposal facility, revenue increased $2,767,000 or 77%
from the same period last year. During the second quarter, the facility disposed
of  87,000  tons  of  material, primarily waste from the Army Corps of Engineers
contract.  It  is  expected  that  the Army Corps of Engineers and other federal
agencies  will  continue  to ship significant volumes under this contract to the
facility  throughout  2003.  The  Company  has  also  entered into a significant
"Event"  business  contract  for  work expected to be completed before year end.

At  the  Beatty,  Nevada  hazardous  treatment  and  disposal  facility, revenue
decreased $316,000 for the three months ended June 30, 2003 from the same period
in 2002. The decrease in revenue was primarily due to decreased volumes of waste
due  to  general  economic  weakness, resulting in little "Event" business to be
competed  for.  The  Company  continues  its  efforts to increase revenue at the
facility  through  focused  sales  efforts.  Revenue is not expected to increase
significantly,  however,  until  the  economy  improves.

At  the  Robstown,  Texas  hazardous  treatment  and  disposal facility, revenue
decreased  $1,719,000  for  the  three  months ended June 30, 2003 from the same
period  in  2002.  The  decrease in revenue was primarily due to reduced "Event"


                                       22
<PAGE>
business,  including  a  large  steel mill clean-up project performed during the
second  quarter  2002.  General economic weakness was also a factor. The Company
continues  its  efforts  to  increase  revenue  and throughput at this facility,
primarily  focusing  on  operational  improvements  and  focused  sales efforts.
Revenue  is  not  expected to increase significantly, however, until the economy
improves.

DIRECT  OPERATING  COSTS
------------------------

For  the  three  months ended June 30, 2003, consolidated direct operating costs
increased  4%  to  $6,056,000  (50%  of  revenue) compared to $5,841,000 (55% of
revenue)  for  the  same  period  in 2002. The relatively lower direct operating
costs  reflect the high fixed cost nature of the disposal business (direct costs
do  not  materially  vary  with  changes in revenue).  The Company continues its
efforts to minimize direct costs through operational improvements.

Operating  Disposal  Facilities
-------------------------------

A  decrease  in  direct operating costs at the Robstown, Texas disposal facility
during  the  three  months  ended  June  30,  2003  was  offset by higher direct
operating costs at the Grand View, Idaho facility. Direct costs at the Richland,
Washington and Beatty, Nevada facilities essentially remained flat. The increase
in  direct  operating  costs at Grand View was due to increased volumes of waste
received. Conversely, the decrease in the direct operating costs at the Robstown
facility  was  largely  due to decreased volumes of waste processed and disposed
of.

Non  Operating  Disposal  Facilities
------------------------------------

Non  Operating  Disposal Facilities incur primarily engineering consulting costs
required  to  meet  regulatory  agency requirements, and labor costs required to
perform  remedial work and safely close the facilities subsequent to operational
use.  For  the  three  months ended June 30, 2003 and 2002, the Company reported
$24,000 and $283,000 of expenses related to licensing facilities for initial use
and  $104,000  and  $19,000  of  costs  in  2003  and 2002 to remediate or close
facilities  subsequent  to  use.

GROSS  PROFIT
-------------

For  the quarter, the higher revenue combined with relatively lower direct costs
generated  improved  gross profit and gross margin. Gross profit for the quarter
was  $6.0  million or 50% of revenue, compared with gross profit of $4.8 million
or  45%  of  revenue during the same quarter last year. Increased revenue at the
Grand  View and Richland facilities allowed the Company to take advantage of the
relatively  fixed  cost  nature of the business and get more 'fall through.'  Of
the $1.4 million increase in revenue, $1.2 million was reflected in gross profit
for  the  quarter.

SELLING, GENERAL AND ADMINISTRATIVE COSTS (SG&A)
------------------------------------------------

For  the  three  months  ended  June  30,  2003,  the  Company  reported SG&A of
$3,289,000 (27% of revenue), a 49% increase from the $2,207,000 (21% of revenue)
for  the same three months of 2002.  The increase in SG&A resulted from a number
of  factors  including  $290,000 of legal fees in second quarter 2003 associated
with  the  Ward  Valley  trial,  contrasted with $255,000 of legal and state fee
refunds  and $200,000 of reversed legal fee accruals that reduced second quarter
2002  SG&A. Company efforts to refocus operations and consolidate administrative
activities  have  incurred  incremental  costs.  On  May  6,  2003,  the Company
implemented  a  new  information  systems  upgrade at two of its hazardous waste
treatment  and  disposal  facilities  with a third facility upgraded on July 24,
2003.  Management believes that implementation of an enhanced information system
platform  along with the recently completed centralized accounting will increase
operational  efficiency and improve the availability and timeliness of financial
and  management  information.

Non  Operating  Disposal  Facilities
------------------------------------

Non  Operating  Disposal  Facilities  incur primarily legal costs to protect the
Company's  investment  in proposed new disposal sites in Ward Valley, California
and  Butte,  Nebraska,  and  legal  and  engineering  consulting  costs  to meet
obligations  at  facilities subsequent to operational use.  For the three months


                                       23
<PAGE>
ended  June  30,  2003  and 2002, the Company reported $284,000 and ($25,000) of
SG&A expenses at Non Operating Disposal Facilities with substantially all of the
2003 expenses being legal costs associated with the Ward Valley litigation.  The
credit  in  second  quarter  2002 SG&A expenses reflects actual legal fees being
less  than  the  previously  estimated  and  accrued  legal  fees related to the
litigation  settled  in  2002.

COMPARISON OF SIX MONTHS ENDED JUNE 30, 2003 AND 2002
-----------------------------------------------------

REVENUE
-------

For  the  six  months  ended  June  30,  2003, the Company reported consolidated
revenue  of  $22,791,000,  5%  lower  than the $24,029,000 reported for the same
period  in 2002. During the six months ending June 30, 2003 and 2002, $7,858,000
and  6,871,000  or  35%  and  29%  of  revenue,  respectively,  represented work
performed  under  contract with the U.S. Army Corps of Engineers. During the six
months ending June 30, 2003, 10% of revenue represented work performed for Nucor
Steel  Company.

Operating  Disposal  Facilities
-------------------------------
At  the  Company's  Grand  View,  Idaho  disposal  facility,  revenue  increased
$3,909,000  or  47%  over  the  same  six months last year. During the first six
months  of 2003, the facility disposed of 165,000 tons of material, mostly under
the  Army  Corps  of Engineers contract, including increased shipments from both
the  Army and other federal agencies utilizing the contract. It is expected that
the Army and other federal agencies will continue to ship significant volumes of
material  to  the  facility  throughout  2003.

The  Richland,  Washington  facility's  revenue decreased $2,463,000 for the six
months ended June 30, 2003 from the same period in 2002. The decrease in revenue
was  primarily  due to a 3,850,000 clean-up project performed for the Army Corps
of  Engineers  unrelated  to  the Company's Idaho site contract during the first
quarter  of 2002 which was not replaced by a like project in 2003. A significant
portion  of  the  Richland  facility's revenue is fixed due to a stipulated rate
agreement  entered  with  the  Washington Utility and Transportation Commission.
During  the  fourth quarter of 2002 the Company hired an experienced salesperson
to  improve  unregulated  revenues  at the site. The hiring of this sales person
resulted  in higher unregulated revenues for the six months, as this part of the
business recorded revenue growth of $437,000 as of June 30, 2003.

In  the  six months ending June 30, 2003, revenue at the Beatty, Nevada disposal
facility  was  $119,000 lower than the same six months in 2002, primarily due to
decreased  volumes  of waste received for disposal. As general economic weakness
has  continued,  less  waste  has been produced and fewer remedial projects have
occurred.  The  Beatty site continues to experience transportation and state tax
disadvantages  when  competing  for  large  remedial  projects and base business
customers in the southern California industrial waste market.

At  the  Robstown,  Texas  hazardous  treatment  and  disposal facility, revenue
decreased $2,440,000 for the six months ended June 30, 2003 from the same period
in  2002.  The  decrease in revenue was primarily due to reduced event business.
Like  Richland,  a large first half 2002 event project was not replaced in 2003.
General  economic  weakness was also a factor. The Company continues its efforts
to  increase  revenue  and  throughput  at  this facility, primarily focusing on
operational improvements and focused sales efforts. Site revenue is not expected
to increase significantly, however, until the economy improves.

DIRECT  OPERATING  COSTS
------------------------

For  the  six  months  ended  June 30, 2003, consolidated direct operating costs
increased  less  than 1% to $12,040,000 (53% of revenue) compared to $12,016,000
(50%  of  revenue)  in  the  same  period  in  2002.  The small change in direct
operating  costs  largely  reflect  the  high  fixed cost nature of the disposal
business  (direct  costs  do  not  materially vary due to revenue).  The Company
continues its efforts to minimize direct costs through operational improvements.

Operating  Disposal  Facilities
-------------------------------

A  decrease  in  direct operating costs at the Robstown, Texas disposal facility
during  the six months ended June 30, 2003 was offset by higher direct operating
costs  at  the  Grand  View,  Idaho  facility.  Direct  costs  at  the Richland,
Washington and Beatty, Nevada facilities essentially remained flat. The increase
in  direct  operating  costs at Grandview was due to increased volumes of waste.
Conversely,  the decrease in the direct operating costs at the Robstown facility
was  due  to  decreased  volumes  of  waste.


                                       24
<PAGE>
Non  Operating  Disposal  Facilities
------------------------------------

Non  Operating  Disposal  Facilities  incur  primarily  legal  and  engineering
consulting  costs  required  to  maintain  licenses  and labor costs required to
remediate  and  safely  close facilities subsequent to operational use.  For the
six  months  ended  June  30,  2003  and  2002, the Company reported $24,000 and
$470,000  of  expenses  related  to  licensing  facilities  for  initial use and
$206,000  and  $137,000  in  2003  and  2002  to  remediate  or close facilities
subsequent  to  use.

GROSS  PROFIT
-------------

For  the six months ending June 30, gross profit decreased to $10.7 million (47%
of  revenue)  from  $12 million (50% of revenue) during the same six months last
year.  The  decreased  gross  profit in the first six months of 2003 reflected a
large  project  at  the  Company's Richland facility that was not replaced. This
Richland project accounted for more than $2 million of gross profit in the first
half  of  2002.

SELLING, GENERAL AND ADMINISTRATIVE COSTS (SG&A)
------------------------------------------------

For  the six months ended June 30, 2003, the Company reported SG&A of $7,786,000
(34%  of  revenue),  a 35% increase from the $5,748,000 (24% of revenue) for the
same  six  months of 2002.  The primary increase in SG&A is due to $1,790,000 in
2003  legal  and related fees associated with the Ward Valley state court trial.
The  Company has invested in centralization, and staffing upgradesand expects to
continue  to  do  so  for  the  remainder  of  2003

COMPARISON OF THREE AND SIX MONTHS ENDED JUNE 30, 2003 AND 2002
---------------------------------------------------------------

INVESTMENT  INCOME
------------------

For the six months ended June 30, 2003, the Company earned $22,000 of investment
income,  down  from  $27,000  in  the  same period of 2002. Investment income is
earnings on cash balances, restricted investments, and notes receivable of which
the  Company  traditionally  maintains  minimal  amounts  and  are a function of
prevailing market rates. The Company received approximately $10,000,000 from the
February  13, 2003 sale of the El Centro municipal waste landfill. This cash was
utilized  to  support  operations,  for  capital  expenditures  and  to fund the
retirement  of  Series  D Preferred Stock and accrued dividends. The balance has
been  maintained  in  very  short  term  investments.  Based on anticipated cash
balances  and  low  interest  rates, the Company does not anticipate significant
investment  income  in  the  future.

INTEREST  EXPENSE
-----------------

For  the three months ended June 30, 2003, the Company reported interest expense
of  $38,000,  a  decrease of $205,000 from the corresponding period in 2002. The
primary  cause  of this decrease is the refinancing of the $8,500,000 industrial
revenue  bond ("IRB") for the Grand View, Idaho facility, which bore an interest
rate  of 8.25%. The IRB was substantially refinanced on November 1, 2002 through
a  $7,000,000,  five year, fully amortizing term loan from the Company's primary
lender, Wells Fargo Bank. The term loan provides for a variable interest rate of
the  bank's  prime  rate  or  an offshore rate plus an applicable margin that is
based  upon  the  Company's performance. For the three and six months ended June
30,  2003,  the  interest rate paid on the majority of the outstanding term loan
was  3.7%.  Additional  reductions  in  interest  expense  are  attributable  to
management's  initiative  to  retire  high  cost  debt,  with  no new debt being
incurred  other  than  periodic  short term borrowings under the line of credit.

OTHER  INCOME  (LOSS)
---------------------

Other Income is composed of the following ($ in thousands):


                                       25
<PAGE>
<TABLE>
<CAPTION>
                                                       Three Months Ended June 30,      Six Months Ended June 30,
                                                          2003             2002           2003            2002
                                                    -----------------  ------------  ---------------  -------------
<S>                                                 <C>                <C>           <C>              <C>
Litigation accrual related to GM settlement         $              --  $         --  $            --  $       (740)
Payment received on National Union settlement                      --            --               --           250
Other litigation related settlements                               --           100               --           100
Insurance claim refunds                                            --             2               --            27
Data processing services                                            8            27                8            27
Cash receipts for sale or rent of property rights                  80            --               80            --
Other miscellaneous income, net                                     5            11                5            11
                                                    -----------------  ------------  ---------------  -------------

Total other income (loss)                           $              93  $        140  $            93  $       (325)
                                                    =================  ============  ===============  =============
</TABLE>


INCOME TAXES
------------

The  components  of  the  income  tax  provision  (benefit)  were as follows (in
thousands):

<TABLE>
<CAPTION>
                                Three Months Ended June 30,      Six Months Ended June 30,
                                   2003             2002           2003            2002
                             -----------------  ------------  ---------------  ------------
<S>                          <C>                <C>           <C>              <C>
State tax expense (benefit)  $              63  $         --  $            55  $         --
                             =================  ============  ===============  ============
</TABLE>

The  tax effects of temporary differences between income for financial reporting
and  taxes  give  rise  to  deferred tax assets and liabilities. The Company has
historically  recorded a valuation allowance for certain deferred tax assets due
to  uncertainties  regarding  future  operating  results  and for limitations on
utilization of acquired net operating loss carry forwards for tax purposes.  The
potential  realization  of  a  significant portion of net deferred tax assets is
based  in  part on the Company's estimates of the timing of reversals of certain
temporary  differences  and  on  the  generation  of  taxable income before such
reversals.  In  2002,  the  Company reevaluated the deferred tax asset valuation
allowance,  determined  it was then "more likely than not" that a portion of the
deferred  tax  asset  would  be  realizable,  and  decreased  the portion of the
valuation  allowance  related  to  its  operating  facilities.

During  the  quarter  ended  March  31,  2003,  the Company wrote off its entire
$20,951,000  Ward  Valley  asset.  This  large write off effectively assures the
Company  of  a  tax  loss in 2003. Due to this expected loss, the $8,284,000 net
deferred  tax  asset  has  been  classified  as long term. Management expects to
realize  a  portion  of  this  asset  in  2004.

The  net  operating  loss carry forward is approximately $48,000,000 at June 30,
2003. Of this carry forward, approximately $2,745,000 is limited pursuant to the
net  operating  loss  limitation  rules of Internal Revenue Code Section 382 and
begins  to  expire  in 2006. The remaining unrestricted net operating loss carry
forward  expires  at  various  dates  between  2010  and  2020.

SEASONAL  EFFECTS
-----------------

Operating  revenues  are  generally  lower  in the winter months than the warmer
summer  months when short duration, one-time remediation projects tend to occur.
However,  both  disposal  and  processing  revenue  are  more affected by market
conditions  than  seasonality.

CAPITAL  RESOURCES  AND  LIQUIDITY
----------------------------------

At  June  30, 2003, cash and cash equivalents totaled $4,750,000, an increase of
$4,615,000 from December 31, 2002. The increase in cash was primarily due to the
sale  of  El  Centro  for $10,000,000 in cash. The Company expects reductions in
cash  balances during the remainder of 2003 as cash is utilized for new disposal
cell  construction  at  its  Grand  View,  Idaho  facility and disposal of waste
removed  from the Oak Ridge, Tennessee facility. Also, in September of 2003, the
Company's  insurance  policy  for  financial  assurance  at  its hazardous waste
disposal  facilities  expires.  It is expected that the cost and cash collateral
requirements  to  renew  this  insurance  will increase. Depending on collateral
requirements,  the  new  terms  could  have  a  material,  adverse impact on the
Company's  available  cash.

On  February  28,  2003,  the Company repurchased all 100,001 shares of Series D
Preferred  Stock  outstanding for a net cash outflow of $2,800,000 after netting


                                       26
<PAGE>
out $3,525,000 in cash received for 2,350,000 common shares issued upon exercise
of  the Series E Warrants. Repurchase of the Series D Preferred Stock eliminated
an  8  3/8%  debt  instrument  due to the preferred stockholders and removed the
potential  dilution that the conversion of these shares would have had on common
stockholders.  In  addition  to  regularly  scheduled debt payments, the Company
early retired $1,014,000 of relatively high cost debt in the first six months of
2003 and retired an additional $658,000 of debt secured by equipment included in
the  sale of El Centro. These preferred stock and debt reduction actions reflect
continuing  management  initiatives  to  improve the Company's balance sheet and
maximize  asset  utilization.

On  March  28,  2003 the Company exercised an early buyout of an operating lease
for  $1,159,000  and  recorded equipment purchases with a book value of $702,000
along with a reduction in the deferred gain of $457,000. In conjunction with the
early  buyout,  the Company recorded an impairment charge of $225,000 on certain
equipment  utilized at the discontinued Oak Ridge facility which was included in
the  early  lease  buyout.

The  early lease buyout accomplished three objectives. The primary objective was
to repay Wells Fargo Bank $500,000 required by the Bank as a condition for their
approving  the  repurchase  of  the  Series  D Preferred Stock. In addition, the
Company  cleared  title to certain leased equipment at the Oak Ridge facility to
support  ongoing  efforts  to sell the facility. Lastly, buyout of the operating
lease eliminated an expensive source of capital, improving the Company's overall
cost  of  capital.

During  the  first  six  months  of  2003,  the Company's days sales outstanding
("DSO")  decreased  to 73 days at June 30, 2003, compared to 77 days at December
31,  2002. Continued improvements in cash and receivable balances are a priority
objective.  The  Company  expects  that  implementation  of  its new information
system  and  the  hiring of a credit and collections manager will improve DSO in
the  second  half  of  2003.

As  of  June 30, 2003 the Company's liquidity, as measured by the current ratio,
decreased  to  1.4  to  1.0  from 1.5 to 1.0 at December 31, 2002. Likewise, the
Company's reported working capital decreased to $5,287,000 at June 30, 2003 from
$8,087,000 on December 31, 2002. The primary reasons for the decrease in working
capital were the repurchase of the Series D Preferred Stock, which resulted in a
net  cash  outflow  of  $2,800,000,  the  retirement  of debt, and $3,151,000 in
capital  expenditures  paid  for  with  cash.  The  majority  of  these  capital
expenditures  were devoted to construction of new disposal capacity at the Grand
View,  Idaho  facility.

The  Company's  leverage,  as  evidenced  by debt to equity ratio, has increased
since  December  31, 2002. The debt to equity ratio increased to 1.3:1.0 at June
30,  2003,  compared  to  0.9:1.0  at  fiscal year-end 2002. The increase in the
Company's  debt  to  equity ratio was caused by the $20,951,000 write off of the
Ward  Valley  asset,  which  outweighed the Company's repayment of approximately
$6,600,000  in  liabilities  during  the  first  six months of 2003. The debt to
equity  ratio  is  defined  as  total liabilities divided by shareholders equity

On June 30, 2003, the Company had in place a $6,000,000 revolving line of credit
with Wells Fargo Bank in Boise, Idaho maturing June 15, 2004. The line of credit
is  secured  by the Company's accounts receivable. At June 30, 2003 and December
31,  2002,  the  outstanding  balance on the revolving line of credit was $0 and
$603,000,  respectively.  The  Company  borrows and repays according to business
demands  and  availability of cash. It currently reserves $1,400,000 as a letter
of  credit  used  as  collateral  for  an  insurance  policy  and  a  lien bond.

Management  estimates  total capital expenditure needs for 2003 of approximately
$8,600,000.  Along  with the normal upgrading and replacement of aging assets, a
$4,500,000  expansion  of disposal capacity at the Grand View, Idaho facility is
projected  to  be  completed  in  the  third  quarter  of  2003.

The  Company's  Oak  Ridge  facility continues to require cash. Usage of cash is
expected  to  increase  as  waste shipped off site is disposed of and billed. At
June  30,  2003, the Company's Oak Ridge facility had liabilities expected to be
paid  in  2003  of  $5,300,000.

The  Company believes that cash on hand and cash flow from operations, augmented
as needed by periodic borrowings under the line of credit, will be sufficient to
meet  the  Company's  cash  needs  for  the  foreseeable  future.

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.


                                       27
<PAGE>
The  Company  does not maintain equities, commodities, derivatives, or any other
instruments  for  trading  or  any  other  purposes,  and  does  not  enter into
transactions denominated in currencies other than the U.S. Dollar.

The Company has minimal interest rate risk on investments or other assets as the
amount  held  is  traditionally  the minimum requirement imposed by insurance or
government  agencies.  At  June 30, 2003, $244,000 is held in short term pledged
investment  accounts  and  $740,000  in  tax  refunds  is  due  from the Federal
Government. Together these items earn interest at approximately 5%, and comprise
1.5%  of assets. An additional $4,500,000 is held in short term investments with
the  majority  expected  to  be  utilized  by  the Company in 2003 for scheduled
capital  expenditures  and  payment  of  accrued  liabilities.

The  Company  does  have interest rate risk on debt instruments.  On October 28,
2002,  the  Company  substantially  refinanced  the  8.25% fixed rate $8,500,000
Industrial  Revenue  Bond  with  a  $7,000,000  five  year  term  loan  from the
Company's primary lender. The term loan provides for a variable interest rate of
the  bank's  prime  rate  or  an offshore rate plus an applicable margin that is
based  upon  the  Company's  performance.  At  June  30,  2003 the interest rate
incurred  by  the  Company  was  3.7%  on  the  outstanding term loan balance of
$6,183,000.   As of June 30, 2003, each 1% change in the term loan interest rate
would  result  in  an  annual  $59,000  change  in  interest  expense.

ITEM 4.   CONTROLS  AND  PROCEDURES.

(a)      Within  the  90  day period prior to the filing of this report, Company
management,  under  the  direction  of  the  Chief  Executive  Officer and Chief
Financial  Officer, carried out an evaluation of the effectiveness of the design
and  operation  of  the Company's disclosure controls and procedures pursuant to
Rule  13a-14  of the Securities Exchange Act of 1934 (Exchange Act).  Based upon
that evaluation, the Chief Executive Officer and Chief Financial Officer believe
that  the  Company's  disclosure controls and procedures are effective in timely
alerting  them to material information required to be disclosed in the Company's
Exchange  Act  filings.

(b)  The  Company  maintains  a  system of internal controls that is designed to
provide reasonable assurance that its records and filings accurately reflect the
transactions  engaged  in.  For  the quarter ending June 30, 2003, there were no
significant  changes  to  internal  controls  or  in  other  factors  that could
significantly  affect  these  internal  controls.

PART II OTHER INFORMATION.
--------------------------
ITEM 1.   LEGAL PROCEEDINGS.

Significant  developments  have  occurred  on  the following legal matters since
December  31,  2002:

US ECOLOGY, INC. V. THE STATE OF CALIFORNIA, ET AL., CASE NO.GIC747562, SUPERIOR
---------------------------------------------------
COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF SAN DIEGO

In  May 2000, subsidiary US Ecology, Inc., sued the State of California, et. al.
("the  State")  for monetary damages exceeding $162 million. The suit stems from
the  State's abandonment of the Ward Valley low-level radioactive waste ("LLRW")
disposal project. California law requires the state to build a disposal site for
LLRW  produced  in  California,  Arizona,  North Dakota and South Dakota; member
states  of  the Southwestern Compact.  US Ecology was selected in 1985 to locate
and  license  the  site using its own funds on a reimbursable basis. In 1993, US
Ecology obtained a license from the State and entered a ground lease.

The  State successfully defended the license against court challenges and, until
Governor  Gray  Davis  took office, actively pursued conveyance of the site from
the  federal  government.  In  September  2000,  the  Superior  Court  granted
California's motion to dismiss all causes of action, which the Company appealed.
In  September  2001, the California Fourth Appellate District Court remanded the
case  for  trial  on promissory estoppel grounds. The case was tried in Superior
Court for the County of San Diego during February and March 2003.

On  March  26,  2003,  the Superior Court issued a Statement of Decision finding
that  the  Company  failed  to establish causation and that its claim is further
barred by the doctrine of unclean hands. The latter finding was based on actions
the  Court  concluded  had created obstacles to an agreement between the federal


                                       28
<PAGE>
government  and  the  State  to  convey  the site. The Court also found that key
elements  of  the  Company's promissory estoppel claim had been proven at trial.
Specifically,  the  Court  ruled  that  the  State  made a clear and unambiguous
promise  to US Ecology in 1988 to use its best efforts to acquire the site, that
Governor  Davis'  administration  abandoned this promise, and that the Company's
reliance  on  the  State's  promise was reasonable and foreseeable. However, the
Court  found  that  the  State's  breach  of  its best efforts promise was not a
substantial factor in causing damages to US Ecology since the federal government
had  continued  to  resist  the  land  transfer.

Based  on  the  uncertainty  of  recovery  following  the  trial court's adverse
decision,  the Company wrote off the $20,951,000 deferred site development asset
at  March  31,  2003.

On May 2, 2003, the Company filed a motion to vacate and enter new judgment with
the  trial  court,  arguing that the March 26 decision misapplied the law to the
facts.  On May 30, 2003, this motion was denied without comment. On June 26, the
Company  filed  a notice of appeal with the California Fourth Appellate District
Court.

The  Company's  financial  interest  in  the pending claim against the State was
improved by an amendment to the November 13, 1998 Ward Valley Interest Agreement
and  Assignment  entered into by American Ecology and its former primary lender.
This  amendment,  entered  into  by the Company and the successor in interest to
that  lender on June 27, 2003, provides that any monetary damages obtained shall
first be allocated to the Company to recover past and future litigation fees and
expenses  relating  to  the  pending  claim.  Thereafter,  any  remaining amount
recovered  shall  be  divided equally between the Company and the former lender.
The  1998  agreement  had  provided that the first $29.6 million less up to $1.0
million  in legal fees and expenses would be owed to the former lender, with any
remaining  recovery  reserved  to  the  Company.

In  early  July,  the  Company engaged the law firm of Cooley Godward on a fixed
price  plus  contingency basis to pursue the appeal, paying the fixed fee at the
time  of  engagement.  A  briefing  schedule  has  not  been  set.

MANCHAK  V.  US  ECOLOGY,  INC., U.S. DISTRICT COURT FOR THE DISTRICT OF NEVADA,
--------------------------------
CIVIL  ACTION  NO.  96-494.

In March 1996, Frank Manchak, Jr. ("Plaintiff" or "Manchak") filed suit alleging
infringement  of  a  sludge treatment patent to stabilize hazardous waste at the
Company's  Beatty,  Nevada  hazardous  waste  disposal facility. Plaintiff seeks
unspecified  damages  for  infringement,  treble  damages,  interest,  costs and
attorney  fees.  On  October 17, 2002, the US District Court for the District of
Nevada  granted  the  Company's motion for summary judgment to dismiss the suit.
Manchak's  motion  for  reconsideration  was denied on January 8, 2003.  Manchak
appealed; however, plaintiff failed to timely file its appellant's brief and the
Company  moved  to  dismiss the appeal. On July 2, 2003, the US Court of Appeals
for  the  Federal  Circuit  granted  the Company's motion to dismiss, and denied
plaintiff's  request  for  an  extension of time and relief from page/word brief
limitations.  On  July 20, 2003 the plaintiff filed a motion for reconsideration
with the appellate court. In January 2003, the Company filed a motion to recover
legal fees and expenses. This motion was denied, which the Company is appealing.

ENTERGY  ARKANSAS,  INC.  ET  AL, CENTRAL INTERSTATE LOW-LEVEL RADIOACTIVE WASTE
--------------------------------------------------------------------------------
COMMISSION  AND  US  ECOLOGY,  INC. ("PLAINTIFFS") V. STATE OF NEBRASKA, ET AL.,
------------------------------------------------------------------------------
CASE NO. 4:98CV3411, U.S. DISTRICT COURT, DISTRICT OF NEBRASKA

This  action  was  brought  in  federal  court  in  December of 1999 by electric
utilities  that generate low-level radioactive waste ("LLRW") within the Central
Interstate  Low-Level  Radioactive  Waste  Compact  (CIC). CIC member states are
Nebraska,  Kansas,  Oklahoma,  Arkansas,  and  Louisiana.  The  action  seeks
declaratory  relief  and  damages  for  bad  faith  in  the  State of Nebraska's
processing  and ultimate denial of US Ecology's application to site, develop and
operate  a  LLRW disposal facility near Butte, Nebraska. US Ecology is the CIC's
contractor  and  developer.  The  CIC  was  originally  named as a defendant and
subsequently  realigned  as  a  plaintiff. US Ecology intervened as a plaintiff.

The  CIC sought to recover contributions made by the utilities and US Ecology to
the  CIC  for  pre-licensing  project  costs  in  the approximate amounts of $95
million  and  $6.2  million,  respectively, and removal of the State of Nebraska
from  the  licensing  process.  The Eighth Circuit Court of Appeals subsequently
dismissed  the  utilities'  and US Ecology's independent claims against Nebraska
for  breach  of  the  good faith provision of the Compact, and for denial of due
process  based on sovereign immunity.  The utilities and US Ecology subsequently
filed  cross claims against the CIC for breach of contract and the imposition of
a  constructive  trust.


                                       29
<PAGE>
On  September  30,  2002,  the  US  District  Court for the District of Nebraska
entered  judgment  against  Nebraska  in  favor  of  the  CIC  for $153 million,
including  approximately  $50 million for prejudgment interest.  Of this amount,
US  Ecology's share was for a $6.2 million contribution and $6.1 for prejudgment
interest.  The  $6.2  million  contribution is included within the balance sheet
amount  of  $6,478,000 of capitalized facility development costs. The Court also
dismissed  the  utilities'  and US Ecology's cross claims for breach of contract
and  imposition of a constructive trust, finding that it was premature to decide
the  merits  of these claims and leaving the question open for future resolution
if  necessary.  The  State  appealed the judgment to the Eighth Circuit Court of
Appeals.

The  case was argued before the Eight Circuit on June 12, 2003. No assurance can
be  given  that the trial court's decision will be affirmed on appeal or that US
Ecology  will  recover  its  contributions  or  interest  thereon.

MATTIE  CUBA,  ET AL. V. AMERICAN ECOLOGY ENVIRONMENTAL SERVICES CORPORATION, ET
--------------------------------------------------------------------------------
AL.,CAUSE NO. 2000-092, 4TH JUDICIAL DISTRICT COURT, RUSK COUNTY, TEXAS
----

This  suit  was  brought  in  November  2000  by 28 named plaintiffs against the
Company  and  named  subsidiaries, the former owners and approximately 60 former
customers  of  its Winona, Texas facility. Plaintiffs seek recovery for personal
injuries,  property  damages  and  exemplary  damages based on negligence, gross
negligence,  nuisance  and  trespass.  The  Company  filed  a motion for summary
judgment  in  July  2002  based on lack of evidence. In November 2002, the trial
court  granted partial summary judgment, dismissing certain causes of action and
reducing  the  number  of plaintiffs, but preserving other causes of action. The
Company  subsequently  filed  a  motion  for  summary judgment seeking dismissal
against all of the adult plaintiffs on statute of limitations grounds.  On March
26,  2003  the  court  granted  this  motion and dismissed the adult plaintiffs.
Seven  minors  and  one  intervenor  remain  party  to  the lawsuit. The Company
believes  plaintiffs'  remaining  case  is  without  merit  and will continue to
vigorously  defend  the matter.  No assurance can be given that the Company will
prevail  or  that  the  matter  can be favorably resolved. The Company's current
insurance  carrier is paying for defense of this matter subject to the Company's
$250,000  deductible,  which  has  been  fully  accrued  in  prior  periods.

ITEM 2.   CHANGES IN SECURITIES AND USE O  PROCEEDS.

On  February  28,  2003,  the Company repurchased all 100,001 shares of Series D
Preferred  Stock for the original sales price of $47.50 a share plus accrued but
unpaid  dividends of $16.56 a share.  A total cost of $6,406,000 was incurred to
complete  the  repurchase.

During  February,  2003,  three  remaining  Series  E  warrant holders exercised
2,350,000  Series  E  warrants  with  an  exercise  price  of  $1.50  per share.
Consequently,  the  Company issued 2,350,000 shares of common stock and received
$3,525,000  in  cash.  There  are  no  Series  E  warrants  outstanding.

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES.

None

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

The  Company  held  its  Annual Meeting of Stockholders on May 29, 2003.  On the
record  date of March 31, 2003 there were 16,960,901 shares of common stock.  At
the  meeting  the Company's nominees for Director were all elected to the Board,
the  selection  of  Moss  Adams  LLP  as  the  Company's independent auditor was
ratified,  and  the  1992  Employee Stock Option Plan was extended for 10 years.
The  voting  on  the  three  items  was  as  follows:

<TABLE>
<CAPTION>
Nominee for Director                                     For      Withheld
----------------------------------------------------  ----------  ---------
<S>                                                   <C>         <C>
David B. Anderson                                     16,200,174     86,511
Rotchford L. Barker                                   16,255,261     31,424
Roy C. Eliff                                          15,838,324    448,361
Edward F. Heil                                        12,903,286  3,383,399


                                       30
<PAGE>
Roger P. Hickey                                       16,259,624     27,061
Stephen A. Romano                                     16,133,791    152,894
Stephen M. Schutt                                     16,200,184     86,501

Ratification of Moss Adams LLP
------------------------------

For                                                   16,230,665
Against                                                    9,033
Abstain                                                   46,987

10 Year Extension of 1992 Employee Stock Option Plan
----------------------------------------------------

For                                                   16,082,980
Against                                                  161,529
Abstain                                                   42,176
</TABLE>


ITEM 5.   OTHER INFORMATION.

On January 28, 2003, John M. Couzens resigned from the Board of Directors.

On  February 17, 2003, the Board of Directors appointed David B. Anderson to the
Board  of  Directors.  Mr.  Anderson is a Principal at Lochborn Partners LLC, in
Chicago,  Illinois. He has held senior executive positions with GATX Corporation
and  Inland Steel Industries. An attorney, Mr. Anderson has extensive experience
in  corporate  strategy,  compliance,  acquisitions,  and  business development.

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K.

     (a)  The following exhibits are filed as part of this report:

Exhibit 31.1   Certification  of  June  30,  2003  Form  10-Q by Chief Executive
               Officer  dated  August  12,  2003
Exhibit 31.2   Certification  of  June  30,  2003  Form  10-Q by Chief Financial
               Officer  dated  August  12,  2003
Exhibit 32.1   Certification  of  June  30,  2003  Form  10-Q by Chief Executive
               Officer  dated  August  12,  2003
Exhibit 32.2   Certification  of  June  30,  2003  Form  10-Q by Chief Financial
               Officer  dated  August  12,  2003

     (b)  Reports  on  Form  8-K.

               On  April  28,  2003, the Company issued an 8-K to announce first
               quarter  2003  earnings.
               On  July  28,  2003, the Company issued an 8-K to announce second
               quarter  2003  earnings.



SIGNATURES
----------

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


                                         AMERICAN ECOLOGY CORPORATION
                                         (Registrant)


Date:  August 12, 2003                   By: /s/ Stephen A. Romano
                                         ---------------------------------------
                                         Stephen A. Romano
                                         President, Chief Executive Officer
                                         and Chief Operating Officer


                                       31
<PAGE>
Date:  August 12, 2003                   By: /s/ James R. Baumgardner
                                         ---------------------------------------
                                         James R. Baumgardner
                                         Senior Vice President, Chief Financial
                                         Officer, Secretary and Treasurer




                                       32
<PAGE>
                                  EXHIBIT INDEX


Exhibit                          Description
-------                          -----------

Exhibit 31.1   Certification  of  June  30,  2003  Form  10-Q by Chief Executive
               Officer  dated  August  12,  2003
Exhibit 31.2   Certification  of  June  30,  2003  Form  10-Q by Chief Financial
               Officer  dated  August  12,  2003
Exhibit 32.1   Certification  of  June  30,  2003  Form  10-Q by Chief Executive
               Officer  dated  August  12,  2003
Exhibit 32.2   Certification  of  June  30,  2003  Form  10-Q by Chief Financial
               Officer  dated  August  12,  2003


                                       33
<PAGE>