<PAGE>


                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C.  20549

                                   FORM 10-Q

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

                 FOR THE QUARTERLY PERIOD ENDED: DECEMBER 31, 1997

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

                        COMMISSION FILE NUMBER: 0-20179

                          RECYCLING INDUSTRIES, INC.
            ------------------------------------------------------
            (Exact Name of Registrant as Specified in its Charter)


              COLORADO                                 84-1103445
 -------------------------------        ---------------------------------------
 (State or Other Jurisdiction of        (I.R.S. Employer Identification Number)
  Incorporation or Organization)

 
        9780 S. MERIDIAN BLVD, SUITE 180
              ENGLEWOOD, COLORADO                             80112
------------------------------------------------            ----------
(Mailing Address of Principal Executive Offices)            (Zip Code)

     Registrant's Telephone Number, Including Area Code:  (303) 790-7372

      Securities Registered Pursuant to Section 12(b) of the Act:  NONE

        Securities Registered Pursuant to Section 12(g) of the Act:  
                        COMMON STOCK, $.001 PAR VALUE

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

                                                         Yes   X      No
                                                             -----       -----

Indicate the number of shares outstanding of each of the Issuer's classes of
common stock as of the close of the period covered by this Report.


            CLASS                           NUMBER OF SHARES OUTSTANDING AS OF:
-----------------------------                        February 5, 1998
Common Stock, $.001 Par Value               -----------------------------------
                                                        18,006,974

<PAGE>

                               TABLE OF CONTENTS



<TABLE>
PART I -- FINANCIAL INFORMATION                                            PAGE
                                                                           ----
<S>        <C>                                                             <C>
 ITEM 1.  FINANCIAL STATEMENTS*

    Consolidated Balance Sheets - December 31, 1997 
     and September 30, 1997                                                 1-2

    Consolidated Statements of Operations for the three months ended 
     December 31, 1997 and 1996                                              3

    Consolidated Statement of Stockholders' Equity for the three months 
     ended December 31, 1997                                                 4

    Consolidated Statements of Cash Flows for the three months ended 
     December 31, 1997 and 1996                                              5

    Notes to the Consolidated Financial Statements                          6-8

 ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS                              9-14

PART II - OTHER INFORMATION

 ITEM 1.  LEGAL PROCEEDINGS                                                 14

 ITEM 2.  CHANGES IN SECURITIES                                           14-17

 ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS               17

 ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K                                  18

 SIGNATURES                                                                 23
</TABLE>
-----------------------
   * The accompanying interim financial statements have not been audited by an
independent certified public accountant.  Only those statements corresponding 
to a fiscal year-end (September 30) are audited.

<PAGE>


                  RECYCLING INDUSTRIES, INC. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                   DECEMBER 31, 1997 AND SEPTEMBER 30, 1997
                            (THOUSANDS OF DOLLARS)


                                    ASSETS
<TABLE>
                                                    DECEMBER 31, 1997   SEPTEMBER 30, 1997
                                                    --------------------------------------
<S>                                                      <C>                 <C>
CURRENT ASSETS:
  Cash                                                   $  1,498            $   746
  Accounts receivable, net                                 26,442              8,820
  Inventories                                              17,677              4,183
  Deferred income taxes                                     1,110                810
  Prepaid expenses and other                                1,352                445
                                                         ---------------------------

    Total Current Assets                                   48,079             15,004
                                                         ---------------------------

PROPERTY, PLANT AND EQUIPMENT, NET                        159,010             33,227
                                                         ---------------------------
OTHER ASSETS:
  Notes receivable, related party                           2,490                 85
  Deferred income taxes                                     1,528                585
  Other assets, net of amortization                        20,132              6,178
                                                         ---------------------------
    Total Other Assets                                     24,150              6,848
                                                         ---------------------------

TOTAL ASSETS                                             $231,239            $55,079
                                                         ---------------------------
                                                         ---------------------------
</TABLE>



         See Accompanying Notes to the Consolidated Financial Statements.


                                         1

<PAGE>

                  RECYCLING INDUSTRIES, INC. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                   DECEMBER 31, 1997 AND SEPTEMBER 30, 1997
                            (THOUSANDS OF DOLLARS)


<TABLE>
                            LIABILITIES AND STOCKHOLDERS' EQUITY

                                                              DECEMBER 31, 1997   SEPTEMBER 30, 1997
                                                              --------------------------------------
<S>                                                           <C>                 <C>
CURRENT LIABILITIES:
  Current maturities of long-term debt                           $    3,300           $    3,300
  Accounts payable                                                    8,341                2,661
  Accounts payable - related parties                                    -                    438
  Other current liabilities                                            1,644               1,049
                                                                 -------------------------------
      Total  Current Liabilities                                     13,285                7,448
                                                                 -------------------------------
LONG-TERM LIABILITIES:
  Long-term debt, less current maturities                           138,280               29,456
  Other long-term liabilities                                        13,157                  -
                                                                 -------------------------------
      Total long-term liabilities                                   151,437               29,456
                                                                 -------------------------------
      Total Liabilities                                             164,722               36,904
                                                                 -------------------------------
COMMITMENTS AND CONTINGENT LIABILITIES
  Redeemable common stock,
    $.001 par value, 363,636 shares issued and outstanding            1,500                1,500
                                                                 -------------------------------
STOCKHOLDERS' EQUITY:
  Preferred stock, no par value, 10,000,000 shares authorized
    70,000 and 10,000 shares issued and outstanding                  19,660                  500
  Common Stock ($.001 par value), 50,000,000 shares authorized,
    18,006,974 and 14,149,780 shares issued and outstanding              17                   14
  Additional paid-in capital                                         58,335               26,846
  Accumulated deficit                                               (12,995)             (10,685)
                                                                 -------------------------------
      Total Stockholders' Equity                                     65,017               16,675
                                                                 -------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                       $  231,239           $   55,079
                                                                 -------------------------------
                                                                 -------------------------------
</TABLE>

               See Accompanying Notes to the Consolidated Financial Statements.

                                       2

<PAGE>

                      RECYCLING INDUSTRIES, INC. AND SUBSIDIARIES
                         CONSOLIDATED STATEMENTS OF OPERATIONS
                     THREE MONTHS ENDED DECEMBER 31, 1997 AND 1996
                    (THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS)


<TABLE>
                                               DECEMBER 31, 1997   DECEMBER 31, 1996
                                               -------------------------------------
<S>                                               <C>                 <C>
Net sales                                         $    31,275         $    10,761
Cost of sales and operating expenses                   26,302               9,452
                                                  -------------------------------
Gross profit                                            4,973               1,309
Selling, general and administrative expenses            2,474               1,213
                                                  -------------------------------
Operating income                                        2,499                  96
                                                  -------------------------------
Other income (expense):
  Interest expense                                     (2,169)               (459)
  Miscellaneous                                           (55)                  8
                                                  -------------------------------
  Total other income (expense)                         (2,224)               (451)
                                                  -------------------------------
Earnings (loss) before income taxes and
  extraordinary loss                                      275                (355)
Provision for income taxes                                 87                 -
                                                  -------------------------------
Earnings (loss) before extraordinary loss                 188                (355)
Extraordinary (loss) on early extinguishment
  of debt, net of tax                                  (2,414)                -
                                                  -------------------------------
Net (loss)                                             (2,226)               (355)
Preferred stock dividends                                  84                 -
                                                  -------------------------------
Net (loss) available to common
  shareholders                                    $    (2,310)        $      (355)
                                                  -------------------------------
                                                  -------------------------------
Basic earnings (loss) per common share:
  Before extraordinary item                       $      0.01         $     (0.03)
  Extraordinary item                                    (0.16)                -
                                                  -------------------------------
Basic earnings (loss) per common share            $     (0.15)        $     (0.03)
                                                  -------------------------------
                                                  -------------------------------
Weighted average number of common shares
outstanding                                        15,351,000          13,795,000
                                                  -------------------------------
                                                  -------------------------------
</TABLE>

               See Accompanying Notes to the Consolidated Financial Statements.

                                       3

<PAGE>

                  RECYCLING INDUSTRIES, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                     THREE MONTHS ENDED DECEMBER 31, 1997
                            (THOUSANDS OF DOLLARS)

<TABLE>
                                                                                   ADDITIONAL
                                          PREFERRED STOCK         COMMON STOCK       PAID-IN   ACCUMULATED
                                         SHARES     AMOUNT      SHARES     AMOUNT    CAPITAL    (DEFICIT)      TOTAL
                                         ------    -------    ----------   ------  ----------  -----------    -------
<S>                                      <C>       <C>        <C>          <C>       <C>       <C>            <C>
Balances, September 30, 1997             10,000    $   500    14,149,780     $14     $26,846    $(10,685)     $16,675

Preferred stock issued for
 acquisitions                            60,000     19,160           -        -          -           -         19,160

Common stock issued in connection
 with acquisitions                          -          -       2,564,705       2      20,747         -         20,749

Common stock issued on
 exercise of options and warrants           -          -       1,292,489       1       1,735         -          1,736

Issuance of warrants in connection
with debt financing                         -          -             -        -        9,007         -          9,007

Preferred stock dividends                   -          -             -        -          -           (84)         (84)

Net (loss)                                  -          -             -        -          -        (2,226)      (2,226)
                                         ------    -------    ----------     ---     -------    --------      -------
Balances, December 31, 1997              70,000    $19,660    18,006,974     $17     $58,335    $(12,995)     $65,017
                                         ------    -------    ----------     ---     -------    --------      -------
                                         ------    -------    ----------     ---     -------    --------      -------
</TABLE>

       See Accompanying Notes to the Consolidated Financial Statements.
                                       4
<PAGE>

                  RECYCLING INDUSTRIES, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                 THREE MONTHS ENDED DECEMBER 31, 1997 AND 1996
                            (THOUSANDS OF DOLLARS)

<TABLE>
                                                      DECEMBER 31,   DECEMBER 31,
                                                          1997          1996
                                                      ---------------------------
<S>                                                   <C>            <C>
OPERATING ACTIVITIES:
 Net (loss)                                            $  (2,226)      $  (355)
 Adjustments to reconcile net (loss) to net
  cash provided by (used in) operating activities:
   Depreciation and amortization                           1,498           532
   Prepaid loan fees                                       1,125           -
   Non-operating activities                                2,532           -
   Deferred income taxes                                  (1,243)          -
 Changes in Assets and Liabilities:
   Accounts receivable                                     2,501           326
   Inventories                                            (3,960)          424
   Prepaid expenses and other                               (132)          128
   Accounts payable                                        3,120          (720)
   Current liabilities, excluding debt                    (1,001)         (149)
                                                        ----------------------
Net Cash provided by Operating Activities                  2,214           186
                                                        ----------------------

INVESTING ACTIVITIES:
  Capital expenditures, net                                 (542)         (261)
  Note receivable, related party                          (1,440)          (35)
  Other assets                                            (2,382)          (99)
  Acquisitions, net of equity issued                    (114,947)         (134)
  Cash acquired in acquisitions                            1,835           -
                                                        ----------------------
Net Cash (used in) Investing Activities                 (117,476)         (529)
                                                        ----------------------

FINANCING ACTIVITIES:
  Proceeds from borrowings, net                           147,868        2,358
  Principal payments on borrowings                        (32,697)      (2,511)
  Other long-term liabilities                                 324          -
  Prepayment penalty on debt                               (2,532)         -
  Loan fees paid                                           (8,600)        (103)
  Dividends Paid                                              (84)         -
  Net proceeds from issuance of stock                      11,735          910
                                                        ----------------------
Net Cash Provided by Financing Activities                 116,014          654
                                                        ----------------------
   Increase in Cash                                           752          311
   Cash, beginning of period                                  746        1,450
                                                        ----------------------
   Cash, end of period                                  $   1,498     $  1,761
                                                        ----------------------
                                                        ----------------------
</TABLE>

       See Accompanying Notes to the Consolidated Financial Statements.
                                       5

<PAGE>

               RECYCLING INDUSTRIES, INC. AND SUBSIDIARIES
             NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


GENERAL INFORMATION:

I.   The Financial Statements included herein have been prepared by the Company
     without audit except the September 30, 1997 balance sheet, which was
     audited. The Statements have been prepared pursuant to the rules and
     regulations of the Securities and Exchange Commission and reflect all
     adjustments, consisting of only normal recurring accruals which are, in
     the opinion of management, necessary for a fair statement of the results
     of operations for the periods shown.  These Financial Statements should be
     read in conjunction with the Financial Statements and notes thereto
     included in the Company's latest report on Form 10-K/A, dated September 30,
     1997.

II.  The results of operations for the three months ending December 31, 1997,
     and 1996, are not necessarily indicative of the results to be expected
     for the full year.

III. Inventories as of December 31, 1997, and September 30, 1997, consisted of
     the following:

<TABLE>
                                        DECEMBER 31, 1997    SEPTEMBER 30, 1997
                                        -----------------    ------------------
<S>                                     <C>                  <C>
     Raw materials                           $ 7,731                $2,590
     Finished goods                            8,108                 1,330
     Other                                     1,838                   263
                                             -------                ------
          Total                              $17,677                $4,183
                                             -------                ------
                                             -------                ------
</TABLE>

IV. ACQUISITIONS

On December 5, 1997, the Company acquired for approximately $23.8 million 
substantially all the assets of Brenner Companies Inc. ("Brenner") located in 
Winston-Salem, North Carolina. The purchase price was financed with $15.7 
million of proceeds in part from a $150 million Senior Credit Facility (The 
Credit Facility), $60 million in Senior Subordinated Debt (Subordinated Debt) 
and Sale of Common Stock, 14,000 shares of the Company's Series F 6-1/2% 
Redeemable Convertible Preferred Stock (the "Series F Preferred"), valued at 
$3.5 million and 14,000 shares of the Company's Series G 6-1/2% Redeemable 
Convertible Preferred Stock (the "Series G Preferred"), valued at $3.5 
million and the assumption of $1.1 million in deferred compensation 
liabilities.  The company will continue the metals recycling operations of 
Brenner.

On December 5, 1997, the Company acquired for approximately $42 million
substantially all the assets of United Metals Recyclers, a North Carolina
general partnership, headquartered in Greensboro, North Carolina ("UMR"). The
purchase price was financed with $36 million in proceeds in part from The
Credit Facility, Subordinated Debt and Sale of Common Stock and 12,000 shares
of the Company's Series H 6% Secured Redeemable Convertible Preferred Stock
(the "Series H Preferred"), valued at

                                       6
<PAGE>

$6 million.  The Company will continue the metals recycling operations of
United.

On December 5, 1997, the Company acquired substantially all the assets of
Money Point Land Holding Corporation and Money Point Diamond Corporation
doing business as Jacobson Metal Company ("Jacobson"), headquartered in
Chesapeake, Virginia, for an aggregate purchase price of approximately $19.9
million. The purchase price was financed with $16.9 million of proceeds in
part from The Credit Facility, Subordinated Debt and Sale of Common Stock and
$3.0 million or 10,000 shares of the Company's Series E Redeemable
Convertible Preferred Stock (the "Series E Preferred"). The company will
continue the metals recycling operations of Jacobson.

On December 5, 1997, the Company acquired for approximately $31 million
substantially all the assets of Central Metals Company, Inc. ("Central")
located in Atlanta, Georgia. The purchase price was financed with $20.7
million of proceeds in part from The Credit Facility, Subordinated Debt, and
Sale of Common Stock, the issuance of 800,000 shares of the Company's Common
Stock having an agreed value of $12.50 per share or $10 million, and the
assumption of $0.3 million of current liabilities. The Company will continue
the metals recycling operations of Central.

On December 5, 1997, the Company acquired for $7.4 million certain assets of
Grossman Bros. Company ("Grossman") located in Milwaukee, Wisconsin and
assumed $0.3 million of trade payables. The purchase price was financed in
part from the proceeds of The Credit Facility, Subordinated Debt, Sale of
Common Stock and a capital lease agreement expiring December 5, 1999 at which
time the Company will pay $4.0 million in the form of cash, stock or a
combination of both.  The Company will continue the metals recycling
operations of Grossman.

On December 8, 1997, the Company acquired for approximately $25.5 million all
the outstanding Capital Stock of Wm. Lans Sons' Co. Inc., ("Lans") and
substantially all of the real property and personal property of Idal Realty
Company ("Idal"), both entities located in South Beloit, Illinois.  The
purchase was financed with $22 million of proceeds in part from The Credit
Facility, Subordinated Debt and Sale of Common Stock and Series I Redeemable
Convertible Preferred Stock (the "Series I Preferred") valued at $3.5
million. The Company will continue the metals recycling operations of Lans.

The following summarized unaudited pro forma results of operations assumes 
the acquisition of Addlestone Recycling Corp. (ARC) and Addlestone 
International Corp (AIC) acquired in the third and fourth quarter of fiscal 
1997 and the acquisitions of Grossman, Jacobson, Brenner, UMR, Central and 
Lans had occurred at the beginning of each period reported.

                                       7
<PAGE>

<TABLE>
Three months ended December 31,                         1997        1996
------------------------------------------------     ----------  ----------
<S>                                                  <C>         <C>
Net sales                                               $60,047     $58,171

Depreciation and amortization                             2,255       2,210

Operating income                                          5,248       4,208

Earnings before income taxes and
    extraordinary loss                                    2,081       1,015

Net loss                                                 (1,103)     (1,847)

Net loss available to common shareholders                (1,382)     (2,126)

Diluted earnings per share:
Earnings before extraordinary item                         0.04        0.02
Loss after extraordinary item                           $ (0.06)    $ (0.13)

Weighted average number of common share
outstanding                                          24,471,070  16,977,823

EBITDA(1)                                               $ 7,503     $ 6,418
</TABLE>

----------------------
(1) The Company has included the calculation of Earnings Before Interest, 
    Taxes, Depreciation and Amortization (EBITDA) as a supplemental schedule 
    to the proforma financial information. The EBITDA calculation, which is 
    not a measure of financial performance under generally accepted accounting 
    principles, was included as certain investors use the data to determine 
    the Company's ability to service its indebtedness. EBITDA is not a 
    substitute for income from continuing operations, net income or cash flows 
    presentation under generally accepted accounting principles.


The pro forma data is for informational purposes only and may not necessarily
reflect the results of operations of the Company had the acquired businesses
operated as part of the Company for the periods ended December 31, 1997 and
1996.













                                       8
<PAGE>

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                          AND RESULTS OF OPERATIONS


The following discussion should be read in conjunction with the Company's
Consolidated Financial Statements and the notes thereto included elsewhere
herein.  Statements included on the following discussion concerning
predictions of economic performance and management's plans and objectives are
forward looking statements.  These statements involve risks and uncertainties
that could cause actual results to differ materially from the forward looking
statements.  Factors which would cause or contribute to such differences are
summarized in the following discussion and include: downturns in the
Company's primary markets; disruptions to the Company's operations from acts
of God or extended maintenance; disruptions in the availability or pricing of
raw materials; transportation difficulties; and the unavailability of
financing to complete management's plans and objectives.


LIQUIDITY AND CAPITAL RESOURCES
<TABLE>
-------------------------------------------------------------------------------
                                                DECEMBER 31,      SEPTEMBER 30,
(Dollars in millions)                               1997              1997
-------------------------------------------------------------------------------
<S>                                             <C>               <C>
Current ratio                                      3.62:1            2.01:1
Working capital                                   $  34.8           $   7.6
-------------------------------------------------------------------------------
</TABLE>

The increased liquidity at December 31, 1997 compared to September 30, 1997 
is primarily attributable to increases in accounts receivable and inventory 
from acquisitions, financed with long-term debt proceeds as discussed below.

The Company invested $0.5 million in property and equipment, not including
property and equipment acquired in business acquisitions, during the quarter
ended December 31, 1997, for expansion of the Company's ferrous and
non-ferrous processing capacity and general modernization and efficiency
upgrades.  Planned capital expenditures during the next year for the
Company's existing facilities are estimated to be $3 million.  Included in
this amount are capital expenditures for the Company's shredders and
materials handling equipment designed to increase capacity and improve
operating efficiencies.  Management anticipates the capital expenditures will
be paid with cash from operations and long-term debt financing.

In December 1997, the Company entered into a $150 million Senior Credit
Facility ("Credit Facility") with General Electric Capital Corporation and
BankBoston, N.A. as agents for the lenders. The Credit

                                      9
<PAGE>

Facility is comprised of a $45 million revolving credit facility, a $40
million term loan due December 5, 2003, with interest and principal payable
quarterly, a $40 million term loan due on the earlier of December 5, 2005 or
six months prior to the maturity of the Subordinated Notes discussed below
with interest and principal payable quarterly and a $25 million acquisition
line of credit due December 5, 2003, with interest and principal payable
quarterly.  The notes bear interest at either (I) the higher of (a) prime
plus .75% or (b) the Federal Funds rate plus 50 basis points per annum plus
 .75%, or (II) at the option of the Company upon certain conditions, the LIBOR
rate plus 2.25%.  The proceeds from the Credit Facility are secured by
substantially all of the Company's assets and are to be used for
acquisitions, repayment of existing indebtedness and general corporate
purposes.

In December 1997, the Company issued $60 million in Senior Subordinated Notes
(the "Subordinated Debt") to various lenders, the proceeds of which are to be
used for acquisitions, repayment of existing indebtedness and general
corporate purposes.  The notes bear interest at 13% and mature in December
2005.

In connection with the Credit Facility and the issuance of the Subordinated
Debt, the Company sold 1,666,666 shares of its Common Stock for an aggregate
of $10 million to various accredited investors in a transaction exempt from
the registration requirements of the Securities Act of 1933, as amended (the
"Securities Act").  The $10 million in proceeds were used for acquisitions,
repayment of existing indebtedness and general corporate purposes.

The Company issued warrants to acquire up to 1,266,000 shares of Common Stock
in connection with the issuance of the $60 million Subordinated Debt.  The
exercise price of the warrants is $0.01 per share.  Additionally, warrants
were issued to acquire 200,000 shares of Common Stock with an exercise price
of $2.50 per share as part of entering into the Credit Facility agreement.
For accounting purposes the fair value of the warrants have been recorded as
paid-in-capital and as a discount to the respective debt.

On December 5, 1997, long-term debt of $32.1 million was repaid in advance of
scheduled maturity with proceeds in part from the Credit Facility and the
issuance of the Subordinated Debt and Common Stock as discussed above.  As a
result of the early extinguishment of debt, the Company recognized $3.6
million in loan fees expense which includes a prepayment penalty of $2.5
million and $1.1 million of prepaid loan fees both of which were charged to
expense as an extraordinary item.

During the quarter, the Company received $1.7 million in proceeds from the
exercise of warrants and options into the Company's Common Stock.

At December 31, 1997, $7.3 million was outstanding under the Company's $45.0
million revolving credit facility.

ACQUISITIONS

On December 5, 1997, the Company acquired for $23.8 million substantially all
the assets of Brenner Companies Inc. ("Brenner") located in Winston-Salem,
North Carolina. The purchase price was financed with $15.7 million of
proceeds in part from The Credit Facility, Subordinated Debt and Sale of
Common Stock discussed above, 14,000 shares of the Company's Series F 6-1/2% 
Redeemable Convertible Preferred Stock (the "Series F Preferred"), valued at 
$3.5 million and 14,000 shares of the Company's Series G 6-1/2% Redeemable 
Convertible Preferred Stock (the "Series G Preferred"), valued at $3.5 
million and the assumption of $1.1 million in deferred compensation 
liabilities. The Series F Preferred is subject to mandatory and automatic 
conversion provisions at the earlier of a consolidation, merger or share 
exchange of the Company or on December 5, 2000. The Series F Preferred will 
convert on December 5, 2000 into the number of shares of the Company's Common 
Stock as determined by dividing $3.5 million plus an amount in cash equal to 
all accrued and unpaid dividends to the date of conversion by the

                                       10
<PAGE>

average market price of the Company's Common Stock, $.001 par value (the
"Common Stock") for the ten trading days preceding the date of conversion.
The Series G Preferred is subject to mandatory and automatic conversion
provisions at the earlier of a consolidation, merger or share exchange of the
Company or on December 5, 2000. The Series G Preferred will convert into the
number of shares of the Company's Common Stock as determined by dividing $3.5
million plus an amount in cash equal to all accrued and unpaid dividends to
the date of conversion by the greater of the average market price of the
Common Stock for the ten trading days preceding the date of conversion, or
2.5 times the average market price for the ten trading days preceding the
date of issuance. At any time prior to conversion, the Company has the right
to redeem the outstanding shares of Series F and G Preferred Stock, in whole
or in part, at a cash redemption price equal to $250 per share plus all
accrued and unpaid dividends to the date of redemption. The Company has
agreed to register on or before December 5, 2000 the shares of Common Stock
received upon conversion of the Series F and G Preferred, unless such shares
may be sold by the holder thereof pursuant to rule 144(k) promulgated under
the Securities Act or any equivalent provision then in effect. The Company
will continue the metals recycling operations of Brenner.

On December 5, 1997, the Company acquired for $42 million substantially all
the assets of United Metals Recyclers, a North Carolina general partnership,
headquartered in Greensboro, North Carolina ("UMR"). The purchase price was
financed with $36 million in proceeds in part from The Credit Facility,
Subordinated Debt and Sale of Common Stock discussed above and 12,000 shares
of the Company's Series H 6% Secured Redeemable Convertible Preferred Stock
(the "Series H Preferred"), valued at $6 million. The Series H Preferred is
subject to mandatory and automatic conversion provisions at the earlier of a
consolidation, merger or share exchange of the Company or on December 5,
2000. Dividend payments and the liquidation preference on the Series H
Preferred is secured by the Company's 50% interest in a scrap metals facility
located in Smithfield, North Carolina.  The Series H Preferred will convert
on December 5, 2000 into the number of shares of the Company's Common Stock 
as determined by dividing $6 million plus an amount in cash equal to all 
accrued and unpaid dividends by the average market price of the Common Stock 
for the ten trading days preceding the date of conversion. At any time prior 
to conversion, the Company has the right to redeem the outstanding shares of 
Series H Preferred Stock, in whole or in part, at a cash redemption price 
equal to $500 per share plus all accrued and unpaid dividends to the date of 
redemption. If the sale of the shares of Common stock into which the Series H 
Preferred is converted yields net proceeds of less than $5,689,000, the 
Company will pay the difference to UMR.  The Company has agreed to register 
on or before December 5, 2000 the shares of Common stock received upon 
conversion of the Series H Preferred,  unless such shares may be sold by the 
holder thereof pursuant to Rule 144(k) promulgated under the Securities Act 
or any equivalent provision then in effect.  The Company will continue the 
metals recycling operations of UMR.

On December 5, 1997, the Company acquired substantially all the assets of
Money Point Land Holding Corporation and Money Point Diamond Corporation
doing business as Jacobson Metal Company ("Jacobson"), headquartered in
Chesapeake, Virginia, for an aggregate purchase price of approximately $19.9
million. The purchase price was financed with $16.9 million of proceeds in
part from The Credit Facility, Subordinated Debt and Sale of Common Stock as
discussed above and $3 million or 10,000 shares of the Company's Series E
Redeemable Convertible Preferred Stock (the "Series E Preferred"). The Series
E Preferred is subject to automatic conversion provisions at the earlier of a
consolidation or merger of the Company or on December 5, 2000. The Series E
Preferred will convert  on December 5, 2000 into the number of shares of the 
Company's Common Stock as determined by dividing $3 million by the average 
market price of the Common Stock for the ten trading days preceding the date 
of conversion. Holders of the Series E Preferred are not entitled to 
dividends. At any time prior to conversion, the Company has the right to 
redeem the outstanding shares of Series E Preferred Stock, in whole or in 
part, at a cash redemption price equal to $300 per share. The Company

                                      11
<PAGE>

will continue the metals recycling operations of Jacobson.

On December 5, 1997, the Company acquired for $31 million substantially all
the assets of Central Metals Company, Inc. ("Central") located in Atlanta,
Georgia. The purchase price was financed with $20.7 million of proceeds in
part from The Credit Facility, Subordinated Debt, and Sale of Common Stock as
discussed above, the issuance of 800,000 shares of the Company's Common Stock
having an agreed value of $12.50 per share or $10 million, and the assumption
of $0.3 million of current liabilities. The Company has guaranteed that the
aggregate market value of the 800,000 shares of Common Stock issued to
Central will be at least $10,000,000 on December 4, 1999.  If the market
value of the Common Stock is less than $10,000,000, the Company will issue
shares of Common Stock to Central having a market value equal to the
difference between $10,000,000 and the market value of the 800,000 shares of
Common Stock initially issued to Central. In connection with the acquisition,
Central was issued warrants to acquire up to 200,000 shares of the Company's
Common Stock for $15.00 per share, exercisable upon satisfaction of certain
financial performance conditions related to the operations acquired from
Central (the "Contingent Warrants").  The exercise price per share of the
Contingent Warrants is subject to adjustment at the time of exercise so that
the aggregate spread between the exercise price of all Contingent Warrants
and the market value of the Common Stock received upon exercise of the
Contingent Warrants is not less than $1,000,000.  The Company granted
"piggyback" registration rights to the holders of the Contingent Warrants
with respect to the shares of Common Stock received upon their exercise.  The
Company will continue the metals recycling operations of Central.

On December 5, 1997, the Company acquired for $7.4 million certain assets of
Grossman Bros. Company ("Grossman") located in Milwaukee, Wisconsin including
the assumption of $0.3 million of trade payables. The purchase price was
financed in part from the proceeds of The Credit Facility, Subordinated Debt,
Sale of Common Stock as discussed above, and a capital lease agreement
expiring December 5, 1999 at which time the Company will pay $4.0 million in
the form of cash, stock or a combination of both.  The Company will continue
the metals recycling operations of Grossman.

On December 8, 1997, the Company acquired for $25.5 million all the
outstanding Capital Stock of Wm. Lans Sons' Co. Inc., ("Lans") and
substantially all of the real property and personal property of Idal Realty
Company ("Idal"), both entities located in South Beloit, Illinois.  The
purchase was financed with $22 million of proceeds in part from The Credit
Facility, Subordinated Debt and Sale of Common Stock as discussed above, and
the issuance of 10,000 shares of Series I Redeemable Convertible Preferred
Stock (the "Series I Preferred") valued at $3.5 million. The Series I
Preferred is subject to automatic and mandatory conversion provisions in the
event of a consolidation or merger.  The Series I Preferred will convert on
December 8, 1999 into the number of shares of the Company's Common Stock as 
determined by dividing $3.5 million plus all accrued and unpaid dividends to 
the date of conversion by the lesser of the average market price of the 
Common Stock for the ten trading days preceding the date of conversion or 
$15.00. For a period of 25 days prior to December 3, 1999, the Company shall 
have the right to redeem the outstanding shares of Series I Preferred Stock, 
in whole or in part, at a cash redemption price equal to $350 per share 
provided that the market price of the Company's Common Stock is greater than 
$15.00 per share. The Company has agreed to register on or before December 5, 
2000 the shares of Common Stock received upon conversion of the Series I 
Preferred. The Company will continue the metals recycling operations of Lans.

Management believes these acquisitions will have a positive impact on its
future results of operations. The historical results of operations do not
fully reflect the operating efficiencies and improvements that are expected
to be achieved by integrating the acquired businesses into the Company's
operations.

Management intends to continue seeking opportunities for expansion in the
metals recycling business and believes that the Company's liquidity, capital
resources and borrowing capabilities are adequate for its current operations.
The Company may, however, need to raise additional capital to fund the
acquisition and integration of additional metals recycling businesses, which
is an integral component of the Company's strategy.  The Company may raise
such funds through warrant exercises, bank financing or public or private
offerings of its securities.  There can be no assurance that the Company will
be able to secure such additional financing. If the Company is not successful
in securing such financing, the Company's ability to pursue its acquisition
strategy may be impaired and the results of operations for future periods may
be adversely affected.

                                      12
<PAGE>

RESULTS OF OPERATIONS

The Company's operating results depend in large part on its ability to 
effectively manage the purchase, processing and sale of scrap metals.  The 
demand for processed ferrous and non-ferrous scrap is subject to general 
economic, industry and market-specific conditions beyond the Company's 
control, which may result in periodic fluctuations in the sales prices of the 
Company's products.  The Company seeks to maintain its operating margins by 
adjusting the purchase price for raw ferrous and non-ferrous scrap in 
response to such fluctuations, subject to local market conditions.  Although 
the Company is unable to hedge against changes in ferrous market prices, it 
seeks to minimize this risk by maintaining low inventory levels of raw and 
processed scrap.

The results of operations for the quarter ended December 31, 1997 and 1996 
have been driven primarily by the Company's acquisition activity.

Net sales for the quarter ended December 31, 1997, were $31.3 million, an 
increase of $20.5 million compared to the same period one year earlier.  The 
increase is primarily related to increased processing capacity resulting from 
the acquisition of ARC and AIC during the third and fourth quarter of 1997 
and the acquisition of Brenner, UMR, Jacobson, Central and Grossman on 
December 5, 1997 and Lans on December 8, 1997 and increases in the average 
selling price of ferrous and non-ferrous material.  Total tons processed of 
ferrous material increased by approximately 190 percent to 165,000 tons 
compared to the same period one year earlier.  The increase in total ferrous 
tons processed was primarily related to new acquisitions as tons processed 
during the quarter by facilities acquired prior to the first quarter of 
fiscal 1997 were almost unchanged.  Total pounds processed of non-ferrous 
material for the quarter were approximately 15,441,000 an increase of 78 
percent compared to the same quarter one year earlier.  The increase was 
partially offset by a decline in pounds processed of non-ferrous material 
during the quarter for facilities acquired prior to the first quarter of 
fiscal 1997.  The average sales price per ton of prepared ferrous material 
was $143 an increase of approximately $21 per ton compared to the same period 
one year earlier.  The average sales price per pound of prepared non-ferrous 
material was $0.42 an increase of approximately $0.11 per pound compared to 
the same period one year ago.  The increase in the average sales price of 
prepared ferrous and non-ferrous material is primarily attributable to 
increased demand and changes in material mix. Net sales from brokerage 
activities increased by $0.4 million compared to the same period one year 
earlier to total $1.1 million.  The increase was primarily related to new 
acquisitions and increased brokerage volume at facilities acquired prior to 
the first quarter of fiscal 1997.

Gross profit for the quarter ended December 31, 1997, was $4.9 million, an 
increase of $3.6 million compared to the same period one year earlier.  As a 
percent of net sales, gross margin increased by 3.7 percent compared to the 
same period one year ago.  The increase in margins is principally 
attributable to new acquisitions and increases in the average selling price 
of prepared ferrous and non-ferrous material which were partially offset by 
increases in the average purchase price of unprepared ferrous and non-ferrous 
material.

Selling, general, and administrative (SG&A) expenses totaled $2.5 million for 
the year ended September 30, 1997 an increase of $1.3 million compared to the 
same period one year earlier. The increase was primarily the result of the 
new acquisitions and staffing and other related administrative expenses in 
anticipation of planned growth.  As a percent of net sales SG&A was 7.9 
percent, a decline of 3.4 percent compared to the same quarter one year 
earlier.  As a result of continued emphasis on productivity improvements, the 
Company has managed to achieve increases in net sales without 

                                      13
<PAGE>

significant increases in support costs as a percentage of sales.

Operating income for the quarter ended December 31, 1997 was $2.5 million an 
increase of $2.4 million compared to the same period one year earlier.  The 
increase was principally a result of the new acquisitions and increases in 
the average selling price of ferrous and non-ferrous material and continued 
emphasis on productivity improvements.  Management is continuously monitoring 
the operations of the facilities and has implemented certain cost cutting 
strategies in an attempt to improve operating income without reducing net 
sales.

Interest expense for the quarter ended December 31, 1997 increased by $1.7 
million compared to the same period one year earlier to total $2.2 million. 
The increase were primarily related to increases in long-term debt to finance 
the acquisition of ARC and AIC in the third and fourth quarter of fiscal 1997 
and Brenner, UMR, Jacobson, Central, Grossman and Lans in the first quarter 
of fiscal 1998.

Miscellaneous expense includes $0.1 million of expense for minority interest 
in the earnings of a metals recycling facility.

During the quarter the company recorded a $2.4 million extraordinary loss net 
of a tax benefit from early extinguishment of debt.  The income tax benefit 
of $1.2 million was recorded as an increase in the deferred tax asset.

During the quarter the Company implemented Financial Accounting Standards 
("FAS") No. 128 "Earnings per Share".  FAS 128 provides for the calculation 
of "basic" and "diluted" earnings per share.  Basic earnings per share 
includes no dilution and is computed by dividing income available to common 
shareholders by the weighted average number of common shares outstanding for 
the period. Diluted earnings per share reflects the potential dilution of 
securities that could share in the earnings of the entity, similar to fully 
diluted earnings per share.  In loss periods, dilutive common equivalent 
shares are excluded, as the effect would be anti-dilutive.

The Company does not believe its businesses have been adversely affected by 
general inflation.

PART II - OTHER INFORMATION

ITEM 1. - LEGAL PROCEEDINGS.

     Incorporated by reference to Item 3 - Legal Proceedings of the Company's 
Annual Report On Form 10-K/A for the fiscal year ended September 30, 1997.

ITEM 2 - CHANGES IN SECURITIES

RECENT SALES OF UNREGISTERED SECURITIES

     During the quarter ended December 31, 1997, the Company completed the 
following sales of its securities pursuant to the exemption from the 
registration requirements of the Securities Act of 1933, as amended (the 
"Securities Act") provided by Section 4(2) of the Securities Act and 
Regulation D promulgated thereunder.  Based upon representations made to the 
Company and further investigation by the Company, the Company believes that 
each purchaser in the following transactions was an accredited investor as 
that term is defined under Rule 501(a) of Regulation D:

                                      14
<PAGE>

     1.   In connection with the Company's acquisition of substantially
          all of the assets of Jacobson, on December 5, 1997, the Company
          issued 10,000 shares of Series E  Preferred to Money Point Land
          Holding Corporation and Money Point Diamond Corporation, as payment
          of $3 million of the purchase price for that acquisition.  See "Item
          2 - Management's Discussion and Analysis of Financial Condition and
          Result of Operations - - Acquisitions," above.

          The Series E Preferred is subject to automatic conversion
          provisions at the earlier of a consolidation or merger of the Company
          or on December 5, 2000. The Series E Preferred will convert on
          December 5, 2000 into the number of shares of the Company's Common 
          Stock as determined by dividing $3 million by the average market price
          of the Common stock for the ten trading days preceding the date of
          conversion. Holders of the Series E Preferred are not entitled to
          dividends. At any time prior to conversion, the Company has the right
          to redeem the outstanding shares of Series E Preferred Stock, in
          whole or in part, at a cash redemption price equal to $300 per share.

     2.   In connection with the Company's acquisition of substantially
          all of the assets of Brenner, on December 5, 1997, the Company issued
          14,000 shares of Series F Preferred and 14,000 shares of Series G
          Preferred to Brenner Companies, Inc., as payment of $7 million of the
          purchase price for that acquisition.  See "Item 2 - Management's
          Discussion and Analysis of Financial Condition and Result of
          Operations - - Acquisitions," above.
          
          The Series F Preferred is subject to mandatory and automatic
          conversion provisions at the earlier of a consolidation, merger or
          share exchange of the Company or on December 5, 2000.  The Series F
          Preferred will convert on December 5, 2000 into the number of shares 
          of the Company's Common Stock as determined by dividing $3.5 million 
          plus an amount in cash equal to all accrued and unpaid dividends to 
          the date of conversion by the average market price of the Company's 
          common stock, $.001 par value (the "common stock") for the ten trading
          days preceding the date of conversion. The Series G Preferred is 
          subject to mandatory and automatic conversion provisions at the 
          earlier of a consolidation, merger or share exchange of the Company 
          or on December 5, 2000. The Series G Preferred will convert into the 
          number of shares of the Company's Common Stock as determined by 
          dividing $3.5 million plus an amount in cash equal to all accrued and
          unpaid dividends to the date of conversion by the greater of the 
          average market price of the Common stock for the ten trading days 
          preceding the date of conversion, or 2.5 times $7.81 (the average 
          market price for the ten trading days preceding the date of issuance).
          At any time prior to conversion, the Company has the right to redeem 
          the outstanding shares of Series F and G Preferred Stock, in whole or 
          in part, at a cash redemption price equal to $250 per share plus all 
          accrued and unpaid dividends to the date of redemption. The company 
          has agreed to register on or before December 5, 2000 the shares of 
          Common stock received upon conversion of the Series F and G Preferred,
          unless such shares may be sold by the holder thereof pursuant to 
          Rule 144(k)promulgated under the Securities Act or any equivalent 
          provision then in effect. Holders of the Series F Preferred are 
          entitled to dividends on a cumulative basis at an annual rate of 
          6 1/2% which shall accrue and be paid in cash upon the conversion of 
          the Series F Preferred, to the extent not previously paid.

     3.   In connection with the Company's acquisition of substantially
          all of the assets of UMR, on December 5, 1997, the Company issued
          12,000 shares of Series H Preferred to United Metals Recyclers, as
          payment of $5.6 million of the purchase price for that acquisition.
          See "Item 2 - Management's Discussion and Analysis of Financial
          Condition 

                                      15
<PAGE>

          and Result of Operations -- Acquisitions," above.

          The Series H Preferred is subject to mandatory and automatic
          conversion provisions at the earlier of a consolidation, merger or
          share exchange of the Company or on December 5, 2000.  Dividend
          payments and the liquidation preference on the Series H Preferred is
          secured by the Company's 50% interest in a scrap metals facility
          located in Smithfield, North Carolina.  The Series H Preferred will
          convert on December 5, 2000 into the number of shares of the Company's
          Common Stock as determined by dividing $6 million plus an amount in 
          cash equal to all accrued and unpaid dividends by the average market 
          price of the Common Stock for the ten trading days preceding the date
          of conversion. At any time prior to conversion, the Company has the
          right to redeem the outstanding shares of Series H Preferred Stock,
          in whole or in part, at a cash redemption price equal to $500 per
          share plus all accrued and unpaid dividends to the date of
          redemption. If the sale of the shares of Common stock into which the
          Series H Preferred is converted yields net proceeds of less than
          $5,689,000, the Company will pay the difference to UMR.  The Company
          has agreed to register on or before December 5, 2000 the shares of
          Common stock received upon conversion of the Series H Preferred,
          unless such shares may be sold by the holder thereof pursuant to Rule
          144(k) promulgated under the Securities Act or any equivalent
          provision then in effect. Holders of the Series G Preferred are 
          entitled to dividends on a cumulative basis at an annual rate of 
          6 1/2% payable as follows:  (i) Dividends that accrue through 
          December 5, 1998 will be paid in cash on the earlier of conversion of 
          the Series G Preferred or December 5, 1999, to the extent not 
          previously paid, and (ii) Dividends that accrue from December 6, 1998 
          to December 5, 2,000 will be paid in cash on the earlier of the 
          conversion of the Series G Preferred or December 5, 2000, to the 
          extent not previously paid.

     4.   In connection with the Company's acquisition of all the outstanding 
          Capital Stock of Lans, on December 8, 1997, the Company issued 10,000
          shares of Series I  Preferred to Wm. Lans Sons' Co. Inc., as payment
          of $3.5 million of the purchase price for that acquisition.  See 
          "Item 2 - Management's Discussion and Analysis of Financial Condition
          and Result of Operations - - Acquisitions," above.

          The Series I Preferred is subject to automatic and mandatory
          conversion provisions in the event of a consolidation or merge.  The
          Series I Preferred will convert on December 5, 2000 into the number 
          of shares of the Company's Common Stock as determined by dividing 
          $3.5 million plus all accrued and unpaid dividends to the date of 
          conversion by the lesser of the average market price of the Common 
          stock for the ten trading days preceding the date of conversion or 
          $15.00. For a period of 25 days prior to December 3, 1999, the Company
          shall have the right to redeem the outstanding shares of Series I 
          Preferred Stock, in whole or in part, at a cash redemption price equal
          to $350 per share provided that the market price of the Company's 
          Common Stock is greater than $15.00 per share.  The Company has agreed
          to register on or before December 5, 2000 the shares of Common Stock
          received upon conversion of the Series I Preferred. Holders of the 
          Series I Preferred are entitled to dividends on a cumulative basis at 
          an annual rate of 8% which shall accrue and be paid in cash on the 
          earlier of conversion or December 5, 2000, to the extent not 
          previously paid.
          
     5.   In connection with the Company's acquisition of substantially all of 
          the assets of Central, on December 5, 1997, the Company issued 
          800,000 shares of its Common Stock as payment of $10 million of the 
          purchase price for that acquisition. See "Item 2 - Management's 
          Discussion and Analysis of Financial Condition and Result of 
          Operations -- Acquisitions," above.

     6.   On December 4, 1997, the Company issued Warrants to acquire up to 
          1,266,000 shares of its Common Stock in connection with the issuance 
          of $60 million Subordinated Debt.  Each warrant is exercisable at a 
          price of $0.01 per share.

     7.   On December 4, 1997, the Company issued warrants to acquire up to 
          200,000 shares of 

                                      16
<PAGE>

          its Common Stock to Recycling Warrant Holdings, G.P. in connection 
          with the recent financing.  The exercise price is $2.50 per share.
          
     8.   On December 4, 1997, in connection with the Credit facility and the
          issuance of the Subordinated Debt, the Company sold 1,666,666 shares
          of its Common Stock for an aggregate amount of $10 million to various
          accredited investors.

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

     On November 17, 1997, the Company held its 1997 Annual Meeting of the 
Shareholders.  The matters voted upon by the Company's shareholders at the 
meeting, including the election of directors, and the votes cast for each 
matter, are as follows:

1.   ELECTION OF DIRECTORS.  The following individuals were elected to serve as
     directors of the Company until its next Annual Meeting of the Shareholders
     and until their respective successors are elected and qualified:

<TABLE>
-------------------------------------------------------------------------------
                                       VOTES AGAINST                   BROKER
DIRECTOR                   VOTES FOR     OR WITHELD     ABSTENTIONS   NON-VOTES
-------------------------------------------------------------------------------
<S>                       <C>          <C>              <C>           <C>
  Thomas J. Weins         11,620,345      46,574             -           -
  Luke F. Botica          11,626,445      40,974             -           -
  Brian L. Klemsz         11,626,145      41,274             -           -
  Jerome B. Misukanis     11,621,445      45,974             -           -
  Greydon H. Neher        11,621,445      45,974             -           -
  Barry D. Plost          11,621,445      45,974             -           -
-------------------------------------------------------------------------------
</TABLE>

2.  To amend the Company's articles of incorporation to remove provisions 
concerning "Substantial Shareholders":

                 Votes Against or                     Broker
     Votes For       Withheld        Abstentions     Non-Votes
     ---------   ----------------    -----------     ---------
     4,773,964      3,233,005          156,653       3,503,797



3.   To approve the 1995 Non-Statutory Stock Option Plan:

                 Votes Against or                     Broker
     Votes For       Withheld        Abstentions     Non-Votes
     ---------   ----------------    -----------     ---------
     7,716,103        459,076          120,467       3,371,773



4.   To approve the 1995 Non-Employee Director Stock Option Plan:

                 Votes Against or                     Broker
     Votes For       Withheld        Abstentions     Non-Votes
     ---------   ----------------    -----------     ---------
     7,939,258        269,875          160,216       3,298,070



5.   To approve the 1997 Executive Stock Option Plan:


                                      17
<PAGE>

                 Votes Against or                     Broker
     Votes For       Withheld        Abstentions     Non-Votes
     ---------   ----------------    -----------     ---------
     7,275,255        811,644          235,591       3,344,929



ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

Exhibit
Number    Description
-------   -----------

2.1       Agreements related to the Acquisition of the Assets of Grossman 
          Brothers Company and Milwaukee Metal Briquetting Co., Inc.

2.1.1     Asset Purchase Agreement dated October 31, 1997, by and among 
          Recycling Industries of Wisconsin, Inc., a Colorado corporation,
          Recycling Industries, Inc., a Colorado corporation, Grossman Brothers 
          Company, Inc., a Wisconsin corporation, Milwaukee Metal Briquetting 
          Co., Inc., a Wisconsin corporation, and Arthur Grossman. Incorporated 
          by reference to Exhibit 2.1.1 to the Company's current report on 
          Form 8-K as filed with the Commission on December 22, 1997 and amended
          on February 11, 1998 on Form 8-K/A, Commission File No. 0-20179.

2.1.2     Amendment to Asset Purchase Agreement dated December 5, 1997, by and 
          among Recycling Industries of Wisconsin, Inc., Recycling Industries, 
          Inc., Grossman Brothers Company, Inc. and Milwaukee Metal Briquetting 
          Co., Inc. Incorporated by reference to Exhibit 2.1.2 to the Company's 
          current report on Form 8-K as filed with the Commission on 
          December 22, 1997 and amended on February 11, 1998 on Form 8-K/A, 
          Commission File No. 0-20179.

2.2       Asset Purchase Agreement dated December 4, 1997 by and among Recycling
          Industries, Inc., a Colorado corporation, Recycling Industries of 
          Atlanta, Inc., a Colorado corporation, and Central Metals Company, 
          Inc., a Georgia corporation. Incorporated by reference to Exhibit 2.2 
          to the Company's current report on Form 8-K as filed with the 
          Commission on December 22, 1997 and amended on February 11, 1998 on 
          Form 8-K/A, Commission File No. 0-20179.

2.3       Asset Purchase Agreement dated December 5, 1997 by and among Recycling
          Industries of Chesapeake, Inc., a Colorado corporation, Recycling
          Industries, Inc., a Colorado corporation, Money Point Land Holding 
          Corporation, a Virginia corporation, Money Point Diamond Corporation, 
          a Virginia corporation, George B. Ginsburg, the Fred Jacobson 
          Revocable Trust, a Virginia trust, and the Dorothy G. Jacobson 
          Revocable Trust, a Virginia trust.  Incorporated by reference to 
          Exhibit 2.3 to the Company's current report on Form 8-K as filed with 
          the Commission on December 22, 1997 and amended on February 11, 1998 
          on Form 8-K/A, Commission File No. 0-20179.

2.4       Stock Purchase Agreement dated December 8, 1997, by and among 
          Recycling Industries, Inc., a Colorado corporation, Wm. Lans Sons' 
          Co., Inc., an Illinois corporation, Bertram Lans, Bruce Lans and
          Scott Lans.  Incorporated by reference to Exhibit 2.4 to the Company's
          current report on Form 8-K as filed with the Commission on 
          December 22, 1997 and amended on February 11, 1998 on Form 8-K/A,
          Commission File No. 0-20179.

2.5       Asset Purchase Agreement dated December 5, 1997 by and among Recycling
          Industries of Winston-Salem, Inc., a Colorado corporation, Recycling
          Industries, Inc., a Colorado corporation, Brenner Companies, Inc., a 
          North Carolina corporation, Frank Brenner, Mike Brenner and the 
          Shareholder of the Brenner Companies, Inc.  Incorporated by reference 
          to Exhibit 2.5 to the Company's current report on Form 8-K as filed 
          with the Commission on December 22, 1997 and amended on February 11, 
          1998 on Form 8-K/A, Commission File No. 0-20179.

2.6       Asset Purchase Agreement dated December 5, 1997 by and among 
          Recycling Industries of Greensboro, Inc., a Colorado corporation, 
          Recycling Industries, Inc., a Colorado corporation, United Metal 
          Recyclers, a North Carolina general partnership, Brenner Companies, 
          Inc., a North Carolina corporation, and Levin Brothers, Inc., a
          North Carolina corporation.  Incorporated by reference to Exhibit 2.6 
          to the Company's current report on Form 8-K as filed with the 
          Commission on December 22, 1997 and amended on February 11, 1998
          on Form 8-K/A, Commission File No. 0-20179.


3(i).1    Articles of Amendment to the Amended and Restated Articles of 
          Incorporation of Recycling Industries, Inc. - Designation of 
          Preferences, Limitations and Relative Rights of the Series E 
          Redeemable Convertible Preferred Stock of Recycling Industries, Inc. 
          Incorporated by reference to Exhibit 3(i).1 to the Company's current 
          report on Form 8-K as filed with the Commission on December 22, 1997 
          and amended on February 11, 1998 on Form 8-K/A, Commission File No. 
          0-20179.

3(i).2    Articles of Amendment to the Amended and Restated Articles of 
          Incorporation of Recycling Industries, Inc. - Designation of 
          Preferences, Limitations and Relative Rights of the Series F 61/2% 
          Redeemable Convertible Preferred Stock of Recycling Industries, Inc. 
          Incorporated by reference to Exhibit 3(i).2 to the Company's current 
          report on Form 8-K as filed with the Commission on December 22, 1997 
          and amended on February 11, 1998 on Form 8-K/A, Commission File No. 
          0-20179.

3(i).3    Articles of Amendment to the Amended and Restated Articles of 
          Incorporation of Recycling Industries, Inc. - Designation of
          Preferences, Limitations and Relative Rights of the Series G 61/2% 
          Redeemable Convertible Preferred Stock of Recycling Industries, Inc. 
          Incorporated by reference to Exhibit 3(i).3 to the Company's current 
          report on Form 8-K as filed with the Commission on December 22, 1997 
          and amended on February 11, 1998 on Form 8-K/A, Commission File No. 
          0-20179.

3(i).4    Articles of Amendment to the Amended and Restated Articles of 
          Incorporation of Recycling Industries, Inc. - Designation of
          Preferences, Limitations and Relative Rights of the Series H 6% 
          Secured Redeemable Convertible Preferred Stock of Recycling 
          Industries, Inc.  Incorporated by reference to Exhibit 3(i).4 to the 
          Company's current report on Form 8-K as filed with the Commission on 
          December 22, 1997 and amended on February 11, 1998 on Form 8-K/A,
          Commission File No. 0-20179.

3(i).5    Articles of Amendment to the Amended and Restated Articles of 
          Incorporation of Recycling Industries, Inc. - Designation of 
          Preferences, Limitations and Relative Rights of the Series I 8% 
          Redeemable Convertible Preferred Stock of Recycling Industries, Inc. 
          Incorporated by reference to Exhibit 3(i).5 to the Company's current 
          report on Form 8-K as filed with the Commission on December 22, 1997 
          and amended on February 11, 1998 on Form 8-K/A, Commission File No. 
          0-20179.

3.1       Amended and Restated Articles of Incorporation, incorporated by
          reference to Exhibit 3.1 to the Company's Registration Statement on
          Form S-1, filed May 3, 1996, as amended, Commission File No. 
          333-4574.

3.2       Amended Bylaws of Recycling Industries, Inc., incorporated by 
          reference to Exhibit 3.1 to the Company's Quarterly Report on Form
          10-Q for the quarter ended June 30, 1997, Commission File No. 
          0-20179.

4.1       Indenture dated December 4, 1997.  Incorporated by reference to 
          Exhibit 4.1 to the Company's current report on Form 8-K as filed with 
          the Commission on December 22, 1997 and amended on February 11, 1998
          on Form 8-K/A, Commission File No. 0-20179.

10.1      Credit Agreement dated December 4, 1997, among Recycling Industries, 
          Inc., a Colorado corporation, Nevada Recycling, Inc., a Nevada 
          corporation, NR Holdings, Inc., a Nevada corporation, Recycling 
          Industries of Texas, Inc., a Colorado corporation, Recycling 
          Industries of Missouri, Inc., a Colorado corporation, Recycling
          Industries of Georgia, Inc., a Colorado corporation, Recycling 
          Industries of Atlanta, Inc., a Colorado corporation, Weissman 
          Industries, Inc., an Iowa corporation, Recycling Industries of South 
          Carolina, Inc., a Colorado corporation, Recycling Industries of 
          Chesapeake, Inc., a Colorado corporation, Recycling Industries of
          Greensboro, Inc., a Colorado corporation, Recycling Industries of 
          Winston-Salem, Inc., a Colorado corporation, William Lans Sons 
          Company, an Illinois corporation, Recycling Industries of Wisconsin, 
          Inc., a Colorado corporation, and General Electric Capital 
          Corporation, a New York corporation, and BankBoston, N.A. Incorporated
          by  reference to Exhibit 10.1 to the Company's current report on 
          Form 8-K as filed with the Commission on December 22, 1997 and amended
          on February 11, 1998 on Form 8-K/A, Commission File No. 0-20179.

27        Financial Data Schedule*

     *    Filed herewith.



REPORTS OF FORM 8-K

     1.   Current Report on Form 8-K dated December 22, 1997, reporting
          the acquisition of substantially all of the assets of Brenner,
          United, Jacobson, Central and Grossman on December 5, 1997 and Lans
          on December 8, 1997, Commission File No. 0-20179.

     2.   Current Report on Form 8-K dated December 22, 1997, reporting a 
          change in auditors for a subsidiary from A.J. Robbins P.C. to 
          BDO Seidman, LLP. Commission File No. 0-20179.

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<PAGE>

                                   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.


                                Recycling Industries, Inc.


Date: February 14, 1997         By: /s/ Thomas J. Wiens
                                    ------------------------------------------
                                    Thomas J. Wiens, Chairman & Chief 
                                    Executive Officer



     

Date: February 14, 1997         By: /s/ Brian L. Klemsz
                                    ------------------------------------------
                                    Brian L. Klemsz, Principal Financial 
                                    Officer


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