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


                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

[Mark  One]
[X]  Quarterly  Report  Pursuant  to  Section  13 or 15(d) of the  Securities
     Exchange Act of 1934 For the quarterly period ended September 30, 1998

                                       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 No. 1-11822


                          TRANSCOR WASTE SERVICES, INC.
             (Exact name of registrant as specified in its charter)


         Florida                                   65-0369288
(State of incorporation)                (I.R.S. Employer Identification Number)

                 1502 Second Avenue, East, Tampa, Florida 33605
              (Address of registrant's principal executive offices,
                               including zip code)


      (Registrant's telephone number, including area code): (813) 248-5885

                                 Not applicable
              (Former name, former address, and former fiscal year,
                          if changed since last report)

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

                Applicable Only to Issuers Involved in Bankruptcy
                   Proceedings During the Preceding Five Years

Indicate by a check mark  whether the  registrant  has filed all  documents  and
reports  required  to be filed by  Sections  12, 13, or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court. Yes [ ] No [ ]

                      Applicable Only to Corporate Issuers

The number of shares of Common  Stock  outstanding  on  November  6,  1998,  was
3,913,300 shares.


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





<PAGE>



                          TRANSCOR WASTE SERVICES, INC.

                                    FORM 10-Q

                                      INDEX


<TABLE>
<S>              <C>                                                                                          <C>    
                                                                                                              PAGE
PART I.           FINANCIAL INFORMATION

                  Item 1.     Consolidated balance sheets at December 31, 1997 and
                                September 30, 1998 (unaudited)................................................1 - 2

                              Consolidated statements of operations for the three months and
                                nine months ended September 30, 1997 and 1998 (unaudited).....................3 - 4

                              Consolidated statements of cash flows for the nine months ended
                                September 30, 1997 and 1998 (unaudited)...........................................5

                              Notes to consolidated financial statement......................................6 - 14

                  Item 2.     Management's discussion and analysis of financial condition
                                and results of operations...................................................15 - 22

                  Item 3.    Quantitative and qualitative disclosures about market risk..........................22


PART II.          OTHER INFORMATION

                  Item 1.     Legal proceedings..................................................................23

                  Item 2.     Changes in securities..............................................................23

                  Item 3.     Defaults upon senior securities....................................................23

                  Item 4.     Submission of matters to a vote of security holders................................23

                  Item 5.     Other information..................................................................23

                  Item 6.     Exhibits and reports on Form 8-K...................................................23

                              Signatures.........................................................................24
</TABLE>

                                                       2

<PAGE>



                  SECURITIES AND EXCHANGE COMMISSION FORM 10-Q
                         PART I - FINANCIAL INFORMATION


Item 1.  FINANCIAL STATEMENTS


                          TRANSCOR WASTE SERVICES, INC.

                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS


<TABLE>
<S>                                                                    <C>                   <C>    

                                                                       December 31,            September 30,
                                                                           1997                   1998
                                                                                                (unaudited)

Current assets:
         Cash......................................................    $     2,115,510       $    9,171,061
         Marketable securities. . . . . . . . . . . . . . . . . .  . . .           ---           21,859,210
         Accounts receivable - trade, net..........................           1,364,772           1,676,740
         Costs and estimated earnings in excess of billings on
           uncompleted contracts...................................             415,514             344,358
         Income tax refund receivable..............................             143,672                 ---
         Deferred income taxes.....................................             720,410             375,000

         Other current assets......................................              48,771              65,202
         Net assets of discontinued solid waste management
           operations..............................................           7,265,280                 ---
                                                                             ----------          ----------
              Total current assets  ...............................          12,073,929          33,491,571
                                                                             ----------          ----------
Property and equipment, net........................................             312,748             301,093
Property held for sale.............................................             410,681           1,209,895
Due from affiliate.................................................           4,040,110           1,079,369
Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     ---                    20,798
                                                                            -----------          ---------- 
              Total assets.........................................         $16,837,468         $36,102,726
                                                                            ===========         ===========
</TABLE>


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

                                        1

<PAGE>



                          TRANSCOR WASTE SERVICES, INC.

                           CONSOLIDATED BALANCE SHEETS

                      LIABILITIES AND STOCKHOLDERS' EQUITY


<TABLE>
<S>                                                                   <C>                    <C>    

                                                                       December 31,           September 30,
                                                                           1997                   1998
                                                                                               (unaudited)

Current liabilities:
         Accounts payable, trade...................................    $       541,104           $1,190,728
         Income tax payable........................................                ---              117,435
         Accrued expenses..........................................            954,432            2,225,206
         Billings in excess of costs and estimated earnings
           on uncompleted contracts................................             15,978              384,853
     Current portion of long-term debt . . . . . . . . . . . . . . .                                  4,203
                                                                             ---------           ----------
              Total current liabilities............................          1,511,514            3,922,425
                                                                             ---------           ---------- 
Long-term debt, net of current maturities (including debt
         owed to Kimmins of $2,003,258 at December 31, 1997
         and September 30, 1998)...................................          2,003,258            2,319,859
Deferred income taxes..............................................          2,267,742                  ---
Commitments and contingencies......................................                ---                  ---

Stockholders' equity:
         Preferred stock, $.001 par value; 1,000,000 shares
           authorized; none issued and outstanding.................                ---                 ---
         Capital stock, $.001 par value; 10,000,000 shares
           authorized; 4,010,000 shares issued and 4,000,000
           shares outstanding......................................              4,010               4,010
         Capital in excess of par value............................         12,193,547          11,675,547
         Retained earnings (deficit)...............................         (1,094,597)         18,733,883
     Unrealized loss on securities net of tax of $11,000. . . .                 ---               (140,790)
                                                                             ---------          ----------
                                                                             11,102,960          30,272,650
         Less treasury  stock, at cost (10,000 and 87,000 shares at
         December 31,1997 and September 30, 1998, respectively)....            (48,006)           (412,208)
                                                                             ---------          ----------
              Total stockholders' equity...........................         11,054,954          29,860,422
                                                                             ---------          ----------
              Total liabilities and stockholders' equity...........        $16,837,468         $36,102,726
                                                                           ===========         ============
</TABLE>


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

                                        2

<PAGE>



                          TRANSCOR WASTE SERVICES, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                                                       Three months ended September 30,
                                                                           1997                1998
                                                                        (unaudited)         (unaudited)
<CAPTION>
<S>                                                                        <C>                <C>    <C>    

Revenue............................................................        $ 2,541,886         $ 2,086,431

Expenses:
         Operating expenses........................................          2,262,985           2,250,824
         Selling, general, and administrative expenses.............            218,851             347,896
                                                                             ---------           ----------
Operating income (loss)............................................             60,050            (512,289)

Interest income, net of expense....................................             66,606              90,717
                                                                             ---------           ----------

Income (loss) from continuing operations before income                          126,656           (421,572)
taxes..............................................................

Provision for income taxes (benefit). . . . . . . . . . . . . . . .              49,291           (139,064)
                                                                              ---------          ----------

Income (loss) from continuing operations...........................              77,365           (282,508)

Discontinued operations:
     Gain on sale of discontinued solid waste division net of
       tax of $9,162,149. . . . . . . . . . . . . . . . . . . . . . .               ---          16,662,818
     Loss from discontinued solid waste division
            (less applicable tax provision of ($893,283)
            in 1997)...............................................           (1,397,191)           ---
                                                                              -----------        ----------

Income (loss) from discontinued operations                                    (1,397,191)        16,662,818
                                                                              -----------        ----------

Net income (loss)..................................................        $  (1,319,826)       $16,380,310
                                                                           ==============       ===========

Share data:
         Basic income per share from continuing operations.........        $        (.33)       $      (.07)
                                                                           ==============       ============
         Diluted income per share from continuing operations.......        $        (.32)       $      (.07)
                                                                           ==============       ============


         Basic income (loss) per share from discontinued
           operations..............................................        $     -              $     4.19
                                                                           ==============       ============
         Diluted income (loss) per share from discontinued
           operations..............................................        $      -             $     4.19
                                                                           ==============       ============

         Total basic income (loss) per share.......................        $       (.33)        $     4.12
                                                                           ==============       ============
         Total diluted income (loss) per share.....................        $       (.32)        $     4.12
                                                                           ==============       ============

Weighted average number of shares outstanding used in computations:
            Basic..................................................           4,000,000           3,977,109
                                                                           ==============       ============
            Diluted................................................           4,041,470           3,977,109
                                                                           ==============       ============


 The accompanying notes are an integral part of these consolidated financial statements
</TABLE>

  
                                      3

<PAGE>


                          TRANSCOR WASTE SERVICES, INC.

                      CONSOLIDATED STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                                        Nine months ended September 30,
                                                                           1997                1998
                                                                        (unaudited)         (unaudited)
<S>                                                                     <C>                <C>    <C>    
Revenue............................................................     $  9,601,267     $ 6,396,808

Expenses:
         Operating expenses........................................        7,654,167       5,803,479
         Selling, general, and administrative expenses.............          778,383         713,313
                                                                        ------------     -----------
Operating income (loss) ...........................................        1,168,717        (119,984)

Interest income, net of expense....................................         (202,575)        262,511
                                                                        ------------     -----------
Income from continuing operations before income taxes..............        1,371,292         142,527

Provision for income taxes (benefit) . . . . . . . . . . . . . . . .         534,699          55,585
                                                                        ------------     ----------- 
Income from continuing operations..................................          836,593          86,942

Discontinued operations:
         Gain on sale of discontinued solid waste division net of
            tax of $11,164,205. . . . . . . . . . . . . . . . . . . . . .       ---       19,921,581
     Loss from discontinued solid waste management
            operations (less applicable tax benefit of $1,280,000 in
            1997 and $81,593 tax provision in 1998.................       (2,289,368)       (180,043)
                                                                        ------------      ----------
Income (loss) from discontinued operations                                (2,289,368)     19,741,538
                                                                        ------------      ----------
         Net income (loss).........................................    $  (1,452,775)   $ 19,828,480
                                                                       =============    ============ 
Share data:
         Basic income per share from continuing operations.........    $        (.36)   $        .02
                                                                       =============    ============
         Diluted income per share from continuing operations.......    $       (.33)    $        .02
                                                                       =============    ============
         Basic income (loss) per share from discontinued
           operations..............................................    $         -      $       4.94
                                                                       =============    ============
         Diluted income (loss) per share from discontinued
           operations..............................................    $         -      $       4.90
                                                                       =============    ============
         Total basic income (loss) per share.......................    $       (.36)    $       4.97
                                                                       =============    ============
         Total diluted income (loss) per share.....................    $       (.33)    $       4.96
                                                                       =============    ============
Weighted average number of shares outstanding used in computations:
            Basic..................................................       4,061,029        3,992,286
                                                                       =============    ============
           Diluted................................................        4,061,029        4,026,844
                                                                       =============    ============

              The accompanying notes are an integral part of these consolidated financial statements
</TABLE>


                                        4

<PAGE>


                          TRANSCOR WASTE SERVICES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                          TRANSCOR WASTE SERVICES, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                                        Nine months ended September 30,
                                                                           1997                1998
                                                                        (unaudited)         (unaudited)
<S>                                                                     <C>                <C>    

Cash flows from operating activities:
         Net income from continuing operations.....................      $   836,953        $    86,942
         Adjustments to reconcile net income from continuing
           operations to net cash provided by operating activities:
              Depreciation and amortization........................       3,164,419              72,081
              Gain on disposal of equipment........................        (563,689)                -
              Changes in operating assets and liabilities:
                  Accounts receivable..............................         988,639           (328,399)
                  Costs and estimated earnings in excess of
                     billings on uncompleted contracts.............        (204,340)            71,156
                  Income tax refund receivable/payable.............        (792,239)        (1,661,225)
                  Other assets.....................................        (579,183)           (20,798)
                  Accounts payable.................................         (49,237)           649,624
                  Accrued expenses.................................         (14,823)         1,270,774
                  Billings in excess of costs and estimated
                     earnings on uncompleted contracts.............        (163,016)           368,875
                                                                         -----------      ------------
         Total adjustments.........................................       1,786,531            422,088
                                                                         -----------      ------------
         Net cash provided by continuing operations................       2,623,124            509,030
         Net loss from discontinued operations...................        (2,289,368)          (180,043)
         Changes in net assets of discontinued operations..........             -            7,265,280
                                                                         -----------      ------------
         Net cash provided by operating activities.................         333,756          7,594,267
                                                                         -----------      ------------
Cash flows from investing activities:
         Capital expenditures......................................      (5,810,279)          (400,000)
         Fixed asset transfers from discontinued operations. . . .              -             (459,640)
     Proceeds from sale of property and equipment..................       1,821,343                -
         Gain on sale of assets of discontinued operations.........             -            19,921,581
     Purchase of marketable securities. . . . . . . . . . . . . . .             -           (4,982,000)
     Investment in Eastern stock. . . . . . . . . . . . . . . . . . .           -          (16,877,210)
     Unrealized loss on marketable securities. . . . . . . . . . .                            (140,790)
                                                                         -----------       ------------ 
Net cash provided by (used in) investing activities................      (3,988,936)        (2,938,059)
                                                                         -----------       ------------
Cash flows from financing activities:
         Proceeds from long-term debt..............................       4,272,544            320,804
         Repayment of long-term debt...............................      (3,443,336)               -
         Proceeds from advances to Kimmins.........................       6,061,980
         Repayment of advances from Kimmins........................             -             2,960,741
         Reduction in paid in capital from Kimmins.................             -              (518,000)
         Purchase of treasury stock. . . . . . . . . . . . . . . . . .          -              (364,202)
                                                                         -----------        ------------
Net cash provided by (used in) financing activities................        6,891,188          2,399,343
                                                                         -----------        ------------
Net increase (decrease)  in cash...................................        3,236,008          7,005,551
Cash, beginning of period..........................................        1,437,788          2,115,510
                                                                        ------------       -------------
Cash, end of period................................................     $  4,673,796       $  9,171,061
                                                                        -------------      -------------
</TABLE>

                                       5

<PAGE>
                         TRANSCOR WASTE SERVICES, INC.

                   NOTES TO CONSOLIDTED FINANCIAL STATEMENTS


1.       Organization and summary of significant accounting policies

         Organization - TransCor Waste Services, Inc. (the "Company") was formed
on  November  6, 1992,  as a  subsidiary  of Kimmins  Corp.  ("Kimmins").  As of
September 30, 1998,  Kimmins owns  approximately  83 percent of the  outstanding
common  stock of the  Company.  The  Company  provided  solid  waste  management
services to commercial, industrial,  residential, and municipal customers in the
state of Florida.  The Company is winding down its demolition  services and will
transfer those  operations to Kimmins.  The Company sold the stock of its wholly
owned  subsidiary,  Kimmins Recycling Corp (KRC) to a competitor on September 2,
1998. As a result of the sale, the Company exited the solid waste industry.

         Basis  of   presentation  -  The   accompanying   unaudited   condensed
consolidated   financial  statements  have  been  prepared  in  accordance  with
generally accepted accounting  principles for interim financial  information and
with the instructions to Form 10-Q. Accordingly,  they do not include all of the
information and notes required by generally accepted  accounting  principles for
complete  financial  statements.  In the opinion of management,  all adjustments
(consisting  of  normal  recurring  accruals)  considered  necessary  for a fair
presentation have been included. Operating results for the three- and nine-month
periods ended September 30, 1998, are not necessarily  indicative of the results
that  may be  expected  for the year  ending  December  31,  1998.  For  further
information, refer to the consolidated financial statements and notes thereto as
of and for the year ended December 31, 1997, included in the Company's Form 10-K
dated December 31, 1997, as filed with the United States Securities and Exchange
Commission.

         Certain amounts in the 1997 consolidated financial statements have been
reclassified to conform to the 1998 presentation.

         Intangible  assets - Intangible  assets consist primarily of the excess
of cost over fair market value of the net assets of the acquired business, which
will be  amortized  on a  straight-line  basis over twenty  years,  and customer
contracts, which will be amortized on a straight-line basis over five years. The
intangible assets,  including customer contracts,  were sold on May 31, 1998, as
part  of the  sale  of the  Jacksonville  operations  to  Eastern  Environmental
Services of Florida, Inc. See Note 3 for additional information.

         Other assets - Other assets  consist  primarily of  pre-contract  costs
associated with  residential  solid waste management  contracts  obtained during
1997 and 1998,  which are being  amortized  on a  straight-line  basis over five
years, the term of the contracts,  and loan costs,  which are amortized over the
term of the loans. All pre-contract  costs  capitalized as of December 31, 1997,
are  held by KRC,  which  was  sold  effective  August  31,  1998.  Accordingly,
pre-contract  costs are included in "net assets of  discontinued  operations" at
December 31, 1997. There are no capitalized  pre-contract costs at September 30,
1998.

                                        6

<PAGE>


                          TRANSCOR WASTE SERVICES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.       Organization and summary of significant accounting policies (continued)

         Earnings per share - Net income  (loss) per share is computed  based on
the weighted  average  number of shares of capital stock.  Diluted  earnings per
share includes  unexercised  stock options  assuming an average stock price. The
convertible  subordinated debt was not included in the computations  because the
assumed conversion would be antidilutive.

         Marketable  Securities  - As a result of the sale of Kimmins  Recycling
Corp. (KRC) to Eastern Environmental Services, Inc. (EESI), the Company received
555,329  shares of common stock of EESI.  Additionally,  commencing in September
1998, the Company began purchasing common stocks and other marketable securities
with a portion of the cash proceeds received from the sale of KRC. In accordance
with the Statement of Financial  Accounting  Standards No. 115,  "Accounting for
Certain  Investments  in  Debt  and  Equity  Securities",  the  investments  are
classified as available-for-sale  securities.  Such securities are carried at an
aggregate  market value of  $21,859,000  as of September 30, 1998. The Company's
cost basis in these  investments  is  $22,000,000,  and the  unrealized  loss of
approximately 141,000, net of deferred income taxes of approximately $89,000, is
reported as a separate component of shareholder's equity.

2.       Property held for sale

         As a result of management's  review of the Company's  various  regional
solid  waste  operating  facilities,  a  decision  was made to  dispose  of less
profitable  operating  assets.  The  Company  sold its  residential  solid waste
services  contract  with St.  Lucie  County in 1997 to a  competitor  and ceased
operations at its Lantana,  Florida,  facility. The Company wrote off intangible
assets of $183,000  associated with these  operations.  Also, in accordance with
SFAS No. 121,  "Impairment of Long-Lived  Assets and for Long-Lived Assets to be
Disposed Of," the Company wrote down certain land and buildings that  management
believed had carrying amounts higher than their fair market value.

         The  impairment  loss of  $590,000  was  determined  by  comparing  the
carrying  amount of  impaired  assets of  approximately  $2,834,000  with recent
offers on the properties held for sale. The $590,000 impairment loss is included
in selling,  general and administrative  expenses on the consolidated statements
of operations  for the year ended December 31, 1997. The land and buildings held
at September  30, 1998 and December 31, 1997 which were not included in the sale
of TransCor's  solid waste  services  division  were carried at  $1,210,000  and
$411,000 respectively, net of an impairment loss of $90,000 as a long-term asset
under the caption "Property held for sale".

         TransCor's  land and buildings  which were being held for sale and were
included in the sale of the solid waste  services  division  are included in the
caption "net assets of discontinued  solid waste management  operations" and are
carried net of an  impairment  loss of $500,000 at  $1,834,000  at December  31,
1997.





                                       7

<PAGE>


                          TRANSCOR WASTE SERVICES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                          3.Property and equipment, net
<TABLE>
<CAPTION>


                                                                       December 31,        September 30,
                                                                           1997                1998
                                                                                            (unaudited)
<S>     <C>                                                            <C>                 <C>    <C>    

         Land......................................................    $  3,019,969        $    ---
         Buildings and improvements................................       4,068,476             ---
         Vehicles..................................................      16,936,386             ---
         Waste containers and equipment............................      13,133,877           699,552
         Furniture and fixtures....................................         700,711             4,003
         Construction in progress..................................          48,419             ---
                                                                        -----------        ----------
                                                                         37,907,838           703,555
         Less accumulated depreciation.............................     (12,846,420)         (402,462)
                                                                        -----------        ----------
                                                                         25,061,418           301,093
         Less net property and equipment included in net assets
           of discontinued solid waste management operations.......     (24,748,670)            ---
                                                                        -----------        ----------
         Net property and equipment attributable to assets of
           continuing operations...................................   $     312,748        $  301,093
                                                                      =============        ========== 
</TABLE>

         Property and  equipment is recorded at cost.  Depreciation  is provided
using the straight-line  method over estimated useful lives,  which range from 3
to 30 years.  Depreciation  expense was  $2,765,000  and $2,308,000 for the nine
months  ended  September  30, 1997 and 1998,  respectively.  For the nine months
ended September 30, 1998,  $72,000 of depreciation  expense was  attributable to
continuing   operations  and  $2,236,000  was   attributable   to   discontinued
operations.



                                        8

<PAGE>


                          TRANSCOR WASTE SERVICES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


4.       Long-term debt
<TABLE>
<CAPTION>

                                                                       December 31,        September 30,
                                                                           1997                1998
                                                                                            (unaudited)
<S>     <C>                                                            <C>                <C>    <C>    

          Notes  payable,   due  through  March  1,  2001,
          payable  in  monthly installments  with  interest
          at  varying  rates  up to 9.75  percent, collateralized
          by equipment................................................ $ 14,191,400       $    ---

          Convertible  subordinated  term note to  Kimmins,
          interest  payable in monthly  installments,  principal
          due  December  1, 2003,  interest at bank's base rate
          (8.5 percent) plus 1 percent...............................     2,003,258          2,003,258

          Mortgage notes,  principal and interest payable in monthly
          installments hrough August 1, 2010,  interest at varying
          rates up to prime plus 1.5 percent, collateralized
          by land and buildings.....................................      4,860,013            320,804
                                                                        -----------          ----------
         Total long-term debt......................................      21,054,671          2,324,062

         Less debt of discontinued operations:
           Long-term debt..........................................     (14,389,103)            ---
           Current portion of long-term debt.......................      (4,662,310)         (4,203)
                                                                        -----------         ----------
         Long-term debt of continuing operations...................    $  2,003,258        $ 2,319,859
                                                                       ============        =========== 
</TABLE>

         As of September 30, 1998,  the Company is a co-borrower  with joint and
several liability on approximately  $3,779,000 of financial  institution debt of
Kimmins. The debt agreements contain certain covenants,  the most restrictive of
which require, for Kimmins for 1998,  maintenance of a consolidated tangible net
worth,  as  defined,  of not less than  $7,500,000  and net income not less than
$3,000,000.  In addition, the covenants prohibit the payment of dividends by the
Company without lender approval.  For all periods presented and for all of 1998,
the Company  believes that Kimmins has complied with or obtained waivers for all
loan covenants.

     The  lenders'  prime and base  rates  under the  Company's  notes  were 8.5
percent at September 30, 1998.




                                        9

<PAGE>


                          TRANSCOR WASTE SERVICES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


5.       Stockholders' equity
         The Company has authorized  1,000,000  shares of preferred stock with a
par value of $.001 per  share,  none of which has been  issued.  Such  preferred
stock  may be  issued  in  series  and  will  have  such  designations,  rights,
preferences, and limitations as may be fixed by the Board of Directors.

         The  convertible  subordinated  term note is  convertible  into 400,652
shares of the  Company's  capital  stock at the time the market  value per share
equals or exceeds $9.00 for twenty consecutive trading days.

         Warrants to purchase  100,000  shares of the Company's  common stock at
$6.00 per share were issued in 1993 to the underwriters of the Company's initial
public  offering.  Warrants  to  purchase  10,000  shares of common  stock  were
exercised  during March 1996. The remaining  warrants to purchase  90,000 shares
expired on March 25, 1998, without being exercised.

         The  Company  is  using  part of the  proceeds  from the sale of KRC to
repurchase  Company stock at  prevailing  market  prices.  There were 10,000 and
87,000  shares of treasury  stock at December 31, 1997 and  September  30, 1998,
respectively.

6.       Related Party Transactions
         On August 14, 1998,  Kimmins,  the parent of the  Company,  acquired an
additional  297,200  shares of common stock of the Company for  $3,031,000  from
Francis M.  Williams,  President  and Chief  Executive  Officer of Kimmins.  The
acquisition  increased  Kimmins'  ownership  percentage  to 81  percent  from 74
percent and results in the  ability to  consolidate  the Company and Kimmins for
federal income tax purposes on a prospective basis.

7.       Discontinued operations
         On  May  31,  1998,  the  Company  sold  its  Jacksonville  area  waste
collection  and  recycling  operating  assets  and  certain  assets of the Miami
front-end load and rear-load  commercial waste and recycling business to Eastern
Environmental  Services of Florida,  Inc., for $11,600,000 in cash. The proceeds
exceeded  the net book  value of the  underlying  assets  sold by  approximately
$5,200,000.  This gain is shown in the Consolidated  Statements of Operations as
part of "gain on sale of discontinued operations."

         On July 17, 1998,  the Company  adopted a formal plan to sell its solid
waste  management  services  operations  to a competitor  Eastern  Environmental
Services,  Inc. (EESI). On August 31, 1998 the Company completed the sale of the
solid waste  management  services (SWMS)  operations.  The assets sold consisted
primarily of accounts  receivables,  contracts and property and  equipment.  The
selling price was $57,800,000 in the form of cash and EESI common stock.

         Operations  for SWMS for the six months  ended June 30,  1998 are shown
separately in the accompanying income statement.  The consolidated statements of
operations  for the three and nine month periods  ended  September 30, 1997 have
been restated to show separately the operating results of the SWMS operations.

         Net  revenues  of the SWMS  operations  for the  three  and nine  month
periods ending  September 30, 1997 and 1998 were $9,793,000 and $6,679,000,  and
$32,684,000  and  $27,276,000,  respectively.  These amounts are included in the
income  or  loss  from  discontinued  operations  portion  of  the  accompanying
consolidated  statements of  operations.  Approximately  $7,610,000 of these net
revenues were received after the Company's adoption of the plan to sell the SWMS
operations.



                                        10

<PAGE>


                          TRANSCOR WASTE SERVICES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


7.       Discontinued operations (continued)

         Information  related to the discontinued SWMS operations of KRC for the
three- and nine-month periods ended September 30, 1998, is as follows:

<TABLE>
<CAPTION>

                                                                       Three months         Nine months
                                                                           ended               ended
                                                                       September 30,       September 30,
                                                                           1998                1998
                                                                        (unaudited)         (unaudited)
<S>     <C>                                                           <C>                 <C>    <C>    

         Net revenue...............................................   $   4,833,000       $  21,526,000
         Operating expenses........................................       4,384,000          18,176,000
         Selling, general and administrative expenses..............       1,650,000           4,002,000
                                                                      --------------      --------------
         Operating income..........................................      (1,201,000)           (652,000)
         Non-operating gain on sale of assets......................        (458,000)          4,805,000
         Interest expense, net.....................................         221,000             913,000
                                                                      --------------      --------------
         Income before provision for income taxes.................       (1,880,000)          3,240,000
         Income taxes..............................................        (722,000)          1,280,000
                                                                      --------------      --------------
         Net income................................................   $  (1,158,000)       $  1,960,000
                                                                      ==============       =============


         Assets  and  liabilities  of  the  discontinued  SWMS  operations  sold
consisted of the following:


                                                                     August 31, 1998       December 31, 1997
                                                                     ---------------       -----------------  
Accounts receivable                                                  $  2,443,670          $  3,885,857
Other current assets                                                    2,215,369               572,951

Property and equipment                                                 25,843,325            27,583,052
Intangible assets                                                          74,898               606,975
Other assets                                                              826,892             1,142,205
                                                                    -------------          ------------  
     Total assets                                                      31,404,154            33,579,478

Current liabilities                                                    10,017,834            26,525,760
                                                                    -------------          ------------
     Net assets disposed of                                         $  21,386,320          $  7,265,280
                                                                    =============          ============
</TABLE>
 

         Net assets sold have been  separately  classified  in the  accompanying
balance sheet at December 31, 1997.

         The sale of the Company's  SWMS  operations  to EESI for  approximately
$57,800,000  resulted  in a gain  of  approximately  $19,922,000  net  of  taxes
approximately $11,164,000. Approximately $15.1 million of the cash proceeds were
used to pay off debt on the property and  equipment of the SWMS  operations.  An
additional $6.6 million was used to fund the working capital deficit of the SWMS
operations at August 31, 1998.



                                       11

<PAGE>


                          TRANSCOR WASTE SERVICES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


8.   Earnings per share

     As required by Financial  Accounting Standards Board Statement No. 128, the
following  tables set forth the  computation  of basic and diluted  earnings per
share:

<TABLE>
<CAPTION>

                                                                              Three months ended
                                                                                 September 30,
                                                                           1997                1998
                                                                           ------------------------


   
      Numerator:

<S>                                                                        <C>              <C>        
         Income from continuing operations.........................        $   77,365       $ (282,508)
         Adjustment for basic earnings per share...................               -                -
                                                                           ----------       -----------
         Numerator for basic earnings per share - income
           available to common stockholders........................            77,365         (282,508)
         Effect of dilutive securities:
         Interest on convertible subordinated term note............               -                -
         Less tax effect of interest...............................               -                -
                                                                          -----------       -----------
         Numerator for diluted earnings per share:
           Income from continuing operations.......................            77,365         (282,508)
           Income (loss) from discontinued operations..............        (1,397,191)       6,662,818
                                                                          ------------      -----------
         Income (loss) applicable to common stockholders
            after assumed conversions..............................       $(1,319,826)     $16,380,340
                                                                          ============     ============ 
         Denominator:

         Denominator for basic earnings per share -
           weighted-average shares.................................         4,000,000        3,977,109
         Effective of dilutive securities:
         Stock options.............................................            41,570              -  
         Warrants..................................................               -                -
         Convertible subordinated term note........................               -                -
                                                                           ----------       ----------
         Dilutive potential common shares..........................            41,570              -  
                                                                           ----------       ----------
         Denominator for diluted earnings per share -
           adjusted weighted-average shares and assumed
           conversions.............................................         4,041,570        3,977,109
                                                                          ===========      ===========
         Basic income (loss) per share from continuing
           operations..............................................       $       .02     $      (.07)
                                                                          ===========      =========== 
         Diluted income (loss) per share from continuing
           operations..............................................       $     (.02)     $      (.07)
                                                                          ===========      =========== 
         Basic income (loss) per share from discontinued
           operations..............................................       $     (.35)     $       4.19
                                                                          ===========      =========== 
         Diluted income (loss) per share from discontinued
           operations..............................................       $     (.35)     $       4.19
                                                                          ===========      =========== 
         Total basic income (loss) per share.......................       $     (.33)     $       4.12
                                                                          ===========      =========== 
         Total diluted income (loss) per share.....................       $     (.33)     $       4.12
                                                                          ===========      =========== 


                                       12

<PAGE>




8.       Earnings per share (continued)


                                                                               Nine months ended
                                                                                 September 30,
                                                                           1997                1998
                                                                          ---------------------------- 
         Numerator:

         Income from continuing operations.........................       $   836,593      $   86,942
         Adjustment for basic earnings per share...................             -                 -
                                                                          ------------     ----------- 
         Numerator for basic earnings per share - income
           available to common stockholders........................           836,593          86,942
         Effect of dilutive securities:
         Interest on convertible subordinated term note............               -               -
         Less tax effect of interest...............................               -               -
                                                                          ------------     -----------
         Numerator for diluted earnings per share:
           Income from continuing operations.......................           836,593          86,942
           Income (loss) from discontinued operations..............         2,289,368)     19,741,538
                                                                          ------------    ------------
         Income (loss) applicable to common stockholders
            after assumed conversions..............................       $(1,452,775)    $19,828,480
                                                                          ============    ============
         Denominator:

         Denominator for basic earnings per share -
           weighted-average shares.................................          4,000,000      3,992,286
         Effective of dilutive securities:                                      51,041         34,558
         Stock options.............................................                -              -
         Warrants..................................................                -              -
         Convertible subordinated term note........................                -              -
                                                                          -------------   ------------ 
         Dilutive potential common shares..........................             51,041         34,558
                                                                          -------------   ------------
         Denominator for diluted earnings per share -
           adjusted weighted-average shares and assumed
           conversions.............................................          4,051,041      4,026,844
                                                                          =============   ============

         Basic income per share from continuing operations.........
                                                                          $        .21    $       .02
                                                                          =============   ============
         Diluted income per share from continuing operations.......
                                                                          $        .21    $       .02
                                                                          =============   ============
         Basic income (loss) per share from discontinued
           operations..............................................       $      (.57)    $      4.95
                                                                          =============   ============
         Diluted income (loss) per share from discontinued
           operations..............................................       $      (.57)    $      4.90
                                                                          =============   ============
         Total basic income (loss) per share.......................       $      (.36)    $      4.97
                                                                          =============   ============
         Total diluted income (loss) per share.....................       $      (.36)    $      4.92
                                                                          =============   ============
</TABLE>
         Unexercised options to purchase 209,000 shares of common stock for 1998
are included in the above  calculations.  The convertible  subordinated debt and
unexercised  options to purchase 92,000 shares of common stock for 1997 were not
included in the  computations  of diluted  income per share  because the assumed
conversion would be antidilutive.





                                       13

<PAGE>




9.       Comprehensive Income

         In accordance with Statement of Financial  Accounting Standards No. 130
"Reporting  Comprehensive Income", which is effective for fiscal years beginning
after December 15, 1997, the following table summarizes the Company's components
of comprehensive income:



<TABLE>
                                                      Three Months Ended                     Nine Months Ended
                                                         September 30                           September 30

                                                     1997                1998               1997               1998
                                                     ------------------------               -----------------------
<S>                                                  <C>             <C>                    <C>            <C>    
Net Income                                           ($1,319,826)    $16,380,310            ($1,452,775)   $19,828,480
Unrealized losses on securities net
of tax                                                    -              140,790                 -             140,790
                                                      -----------    ------------           ------------   ------------

Comprehensive income                                 ($1,319,826)    $16,239,520            ($1,452,775)   $19,687,690
                                                     ============    ============           =============  ============ 

</TABLE>




































                                       14

<PAGE>




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

                              RESULTS OF OPERATIONS

          COMPARISON OF THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997

         Revenue from continuing operations for the three months ended September
30, 1998, was $2,086,000,  representing a decrease of $455,000, or approximately
18 percent,  from  $2,542,000 for the three months ended September 30, 1997. The
decrease  in  total  revenue  was  attributable  to  the  Company's   demolition
operations,  as a result of the Company's  decision to wind down its  demolition
operations and transfer them to Kimmins. The Company is no longer bidding on new
contracts and expects to complete its  remaining  contracts by the first quarter
of 1999.  In  addition,  discontinued  operations  from solid  waste  management
services  experienced a decrease in revenue of $2,777,000 to $4,832,000  for the
three  months ended  September  30, 1998,  compared to  $7,610,000  for the same
period  in 1997  primarily  as a  result  of the sale of KRC to EESI and also to
sales of operating assets, including customer contracts.

         Operating  expenses for the three months ended September 30, 1998, were
$2,251,000, representing a decrease of $12,000, or approximately 1 percent, from
$2,263,000  for the three months ended  September 30, 1997.  The increase in the
percentage  in  operating  expenses was  attributable  primarily to increases in
certain major  operational  expenses;  such as, equipment and direct labor costs
related to the Company's demolition operations caused by weather related delays.

         For  continuing  operations,   selling,   general,  and  administrative
expenses  for  the  three  months  ended  September  30,  1998,  were  $348,000,
representing an increase of $129,000, or approximately 59 percent, from $219,000
for the three  months  ended  September  30,  1997.  The  increase is  primarily
attributable  to  costs  associated  with  the  sale  of the  discontinued  SWMS
operations.  For discontinued  operations,  selling,  general and administrative
expenses  for the three  months  ended  September  30,  1998,  were  $1,649,000,
representing a decrease of $492,000, or 23 percent, from $2,141,000 for the same
period in 1997.  The dollar and  percentage  decrease in selling,  general,  and
administrative  expenses is primarily  attributable  to reduced  overhead costs,
such as  administrative,  sales,  marketing and labor costs that are  associated
with facilities that have been closed or sold and from  management's  actions to
reduce overhead costs.

         Revenues and costs for the remainder of the year will be  substantially
decreased  primarily  due to the  sale of the  solid  waste  operations  and the
continuation of the winding down of the demolition  operations during the fourth
quarter 1998. See Note 6 for additional information regarding the sale.

         Interest income,  net of interest  expense,  for the three months ended
September  30,  1998,  was $91,000 as  compared to $67,000 for the three  months
ended  September  30, 1997.  The average  amount of debt  outstanding  decreased
between periods.

         The  Company's  income tax  provision  for  continuing  operations  was
calculated using a rate of approximately 37 percent and 39 percent for the three
month periods ended September 30, 1998 and 1997, respectively.

         As a  result  of the  foregoing,  the  Company  recorded  a  loss  from
continuing operations of $283,000 for the three months ended September 30, 1998,
as compared to income of $77,000 for the three months ended September 30, 1997.







                                       15

<PAGE>




         In  addition to the  continuing  operations,  the  Company  incurred no
losses from  discontinued  solid waste  management  services  operations for the
three months ended September 30, 1998,  representing a decrease of $1,397,000 or
approximately  92 percent from  $1,397,000 for the three months ended  September
30, 1997. The dollar and percentage decrease in losses is primarily attributable
to the sale of KRC in August 1998, the sale of certain  operating  assets in May
1998 and reduced  overhead costs such as  administrative,  sales,  marketing and
labor costs as a result of facility  closures and managements  actions to reduce
overhead costs.

         The  Company's  sale  of  KRC to  EESI  for  approximately  $57,800,000
resulted in a gain of $16,663,000  net of taxes of $9,162,000.  Also included in
the gain are  losses of  $1,729,000  net of a tax  benefit  of  $1,105,000  from
discontinued solid waste management  services operations for the period from the
measurement date on July 14, 1998 through August 31, 1998.

         The Company  reported  net income of  $16,380,000  for the three months
ended  September 30, 1998  compared  with a net loss of $1,320,000  for the same
period during 1997.









































                                       16

<PAGE>




                              RESULTS OF OPERATIONS

           COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997

         Revenue for the nine months ended  September 30, 1998, was  $6,397,000,
representing  a decrease  of  $3,204,000,  or  approximately  33  percent,  from
$9,601,000  for the nine months ended  September 30, 1997. The decrease in total
revenue was primarily attributable to the Company's demolition operations,  as a
result of the  Company's  decision to wind down its  demolition  operations  and
transfer them to Kimmins.  The Company is no longer bidding on new contracts and
expects to complete its  remaining  contracts by the first  quarter of 1999.  In
addition,   discontinued   operations  from  solid  waste  management   services
experienced  a decrease in revenue of  $2,862,000  to  $21,526,000  for the nine
months ended September 30, 1998,  compared to $24,388,000 for the same period in
1997. The decrease was primarily the result of the sale of KRC to EESI and sales
of operating assets, including customer contracts.

         Operating  expenses for the nine months ended  September 30, 1998, were
$5,803,000,  representing a decrease of $1,851,000, or approximately 24 percent,
from  $7,654,000  for the nine months ended  September 30, 1997. The increase in
the percentage in operating expenses was attributable  primarily to increases in
certain major  operational  expenses;  such as, equipment and direct labor costs
related to the Company's  demolition  operations as a result of weather  related
delays.

         For  continuing  operations,   Selling,   general,  and  administrative
expenses  for the  nine  months  ended  September  30,  1998,  were  $1,713,000,
representing a decrease of $65,000,  or  approximately 9 percent,  from $778,000
for the nine months ended  September  30,  1997.  For  discontinued  operations,
selling, general and administrative expenses for the nine months ended September
30, 1998, were $4,002,000, representing a decrease of $2,103,000, or 34 percent,
from $6,105,000 for the same period in 1997. The dollar and percentage  decrease
in selling,  general, and administrative  expenses is primarily  attributable to
reduced overhead costs, such as administrative, sales, marketing and labor costs
that are  associated  with  facilities  that have  been  closed or sold and from
management's actions to reduce overhead costs.

         The Company sold its  Jacksonville  area waste collection and recycling
operating  assets and certain  assets of the Miami  front-end load and rear-load
commercial  waste and recycling  business to Eastern  Environmental  Services of
Florida,  Inc., for  $11,600,000 in cash.  This  transaction,  combined with the
Company's sale of certain other vehicles, waste containers, and equipment during
the three months ended September 30, 1998,  resulted in a gain of  approximately
$5,263,000. These assets were primarily utilized in the Company's commercial and
residential waste collection services.  This gain is included in gain on sale of
discontinued operations for the nine-month period ended September 30, 1998.

         Revenues and costs for the remainder of the year will be  substantially
decreased  primarily  due to the  sale of the  solid  waste  operations  and the
continuation of the winding down of the demolition  operations during the fourth
quarter of 1998. See Note 6 for additional information regarding the sale.

          Interest income,  net of interest  expense,  for the nine months ended
September 30, 1998, was $263,000 as compared to interest expense of $203,000 for
the nine months ended September 30, 1997. The average amount of debt outstanding
decreased between periods.

                                       17

<PAGE>




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

                              RESULTS OF OPERATIONS

     COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 (continued)

         The  Company's  income tax  provision  for  continuing  operations  was
calculated  using a rate of  approximately  39  percent  for both the nine month
periods ended September 30, 1998 and 1997.

         As a  result  of  the  foregoing,  the  Company  recorded  income  from
continuing  operations of $87,000 for the nine months ended  September 30, 1998,
as compared to income of $837,000 for the nine months ended September 30, 1997.

         In addition the continuing operations, the Company incurred losses from
discontinued solid waste management services operations of $180,000 for the nine
months  ended  September  30, 1998,  representing  a decrease of  $2,109,000  or
approximately 92 percent from $2,289,000 for the nine months ended September 30,
1997. The dollar and percentage decrease in losses is primarily  attributable to
the sale of KRC in August 1998, the sale of certain operating assets in May 1998
and reduced overhead costs such as  administrative,  sales,  marketing and labor
costs as a result  of  facility  closures  and  managements  actions  to  reduce
overhead costs.

         The  Company's  sale  of  KRC to  EESI  for  approximately  $57,800,000
resulted in a gain of $19,992,000 net of taxes of $11,164,000.  Also included in
the gain are  losses of  $1,729,000  net of a tax  benefit  of  $1,105,000  from
discontinued solid waste management  services operations for the period from the
measurement date on July 14, 1998 through August 31, 1998.

         The  Company  reported  net income of  $19,828,000  for the nine months
ended  September  30,1998  compared with a net loss of  $1,453,000  for the same
period during 1997.

                         LIQUIDITY AND CAPITAL RESOURCES

         At September  30, 1998,  the Company had a working  capital  surplus of
$29,569,000 compared to a working capital surplus of $10,562,000 at December 31,
1997.  Working  capital  was  impacted  primarily  by  increases  in  cash,  and
marketable  securities.  Current  financial  resources,  anticipated  funds from
operations, and repayment of receivables from affiliate (if needed) are expected
to be adequate to meet cash  requirements  in the year ahead and the foreseeable
future. At September 30, 1998, the Company had cash of $9,171,000 and marketable
securities of $21,859,000.

         Net cash provided by operating  activities during the nine months ended
September  30,  1998,  was  $7,594,000  compared to $334,000 for the nine months
ended September 30, 1997. The increase in cash provided by operating  activities
was due primarily to changes in net assets in discontinued operations.

         Net cash used in  investing  activities  during the nine  months  ended
September 30, 1998, was $2,938,000 as compared to $3,989,000 for the nine months
ended  September 30, 1997. The decrease in cash used in investing  activities is
primarily  attributable  to a gain of  $19,992,000  from the sale of  assets  of
discontinued  operations  which was offset by  investment  in Eastern  stock and
marketable securities of $21,859,000.


                                       18

<PAGE>





         Net cash provided in financing  activities during the nine months ended
September 30, 1998, was $2,399,000 as compared to $6,891,000 for the nine months
ended  September 30, 1997.  This was  primarily a result of a reduced  amount of
cash advances from Kimmins in 1998 as compared to 1997.

         During the nine months ended September 30, 1998 and 1997, the Company's
average trade  receivables  were  outstanding for 65 and 63 days,  respectively.
Both  averages  were based on the first nine  months of revenue  annualized  and
compared to the trade receivable  balances at quarter end.  Management  believes
that the number of days  outstanding for its receivables  approximates  industry
norms.  Credit is extended  based on an evaluation of the  customer's  financial
condition.  Credit losses are provided for in the financial  statements and have
been within management's expectations.

         During the nine months ended September 30, 1998 and 1997, the Company's
average  trade  payables were  extended for 19 and 50 days,  respectively.  Both
averages were based on the first nine months of operating and selling,  general,
and administrative expenses annualized and compared to trade payable balances at
quarter end.

                                       19

<PAGE>




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

                   LIQUIDITY AND CAPITAL RESOURCES (continued)

         As of September 30, 1998,  the Company is a co-borrower  with joint and
several liability on approximately  $2,201,000 of financial  institution debt of
Kimmins. The debt agreements contain certain covenants,  the most restrictive of
which require, for Kimmins for 1998,  maintenance of a consolidated tangible net
worth,  as  defined,  of not less than  $7,500,000  and net income not less than
$3,000,000.  In addition, the covenants prohibit the payment of dividends by the
Company without lender approval.  For all periods presented and for all of 1998,
the Company  believes that Kimmins has complied with or obtained waivers for all
loan covenants.

         The  Company   has  no  current   material   commitments   for  capital
expenditures  relating  to any  other  new  facilities,  other  than to  acquire
vehicles and equipment estimated to be approximately  $3,500,000 for the City of
Cape  Coral  Contract,  which  begins  October 1,  1998.  Cash of  approximately
$41,000,000  is  anticipated   from  the  sale  of  the  Company's  solid  waste
subsidiary,  which  closed  on  August  31,  1998.  See  Note  6 for  additional
information regarding the sale.

         Historically,  inflation has not had a material effect on the Company's
operations.  If  inflation  increases,  the Company will attempt to increase its
prices to offset its increased  expenses.  No assurance  can be given,  however,
that the Company will be able to  adequately  increase its prices in response to
inflation.

New Accounting Pronouncements

          In February 1997, the Financial  Accounting  Standards  Board ("FASB")
issued Statement of Financial Accounting Standards No. 128, "Earnings per Share"
("SFAS No.  128").  Statement  No. 128 replaced the  calculation  of primary and
fully diluted  earnings per share with basic and diluted earnings per share. The
Company adopted the provisions of Statement 128 No. effective December 31, 1997.
All earnings per share accounts for all periods  presented have been restated to
conform to the Statement No. 128 requirements.

          In June  1997,  the FASB  issued  Statement  of  Financial  Accounting
Standards No. 130,  "Reporting  Comprehensive  Income ("SFAS No. 130"). SFAS No.
130 requires that total comprehensive  income and comprehensive income per share
be  disclosed  with  equal  prominence  as net income  and  earnings  per share.
Comprehensive  income is defined as changes in stockholders' equity exclusive of
transactions with owners such as capital  contributions and dividends.  SFAS No.
130 is effective for fiscal years beginning after December 15, 1997.  Management
is  currently  assessing  the  impact of SFAS No.  130,  but does not expect its
effect to be material.



                                       20

<PAGE>




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

          In June  1997,  the FASB  issued  Statement  of  Financial  Accounting
Standards No. 131,  "Disclosures  about  Segments of an  Enterprise  and Related
Information" ("SFAS No. 131"), which supercedes  Financial  Accounting Standards
No.  14.  SFAS No.  131 uses a  management  approach  to  report  financial  and
descriptive information about a Company's operating segments. Operating segments
are revenue-producing  components of the enterprise for which separate financial
information is produced internally for the Company's management. SFAS No. 131 is
effective  for fiscal years  beginning  after  December 31, 1997.  Management is
currently  assessing  the impact of SFAS No. 131, but does not expect its effect
to be material.

         The American Institute of Certified Public Accountants  recently issued
Statement  of Position  98-5,  Reporting  on the Costs of  Start-up  Activities.
Start-up  costs are  defined  broadly  in the SOP as those  one-time  activities
related  to  opening a new  facility,  introducing  a new  product  or  service,
conducting business in a new territory,  conducting business with a new class of
customer or beneficiary,  initiating a new process in an existing  facility,  or
commencing some new operation.  Start-up costs, including  organizational costs,
should be expensed as incurred under the new SOP. The SOP would be effective for
most entities for fiscal years beginning after December 15, 1998. As a result of
the sale of the  Company's  solid waste  subsidiary,  the  Company  will have no
capitalized start-up costs remaining at December 31, 1998.

Impact of Year 2000

         Some of the Company's  older  computer  programs were written using two
digits rather than four digits to define the applicable year. As a result, those
computer programs have time-sensitive  software that recognize a date using "00"
as the year 1900 rather than the year 2000. This could cause a system failure or
miscalculations  causing  disruptions  of  operations,  including,  among  other
things, a temporary inability to process transactions,  send invoices, or engage
in similar normal business activities.

         The  Company has  completed  an  assessment  and will have to modify or
replace  portions of its  software so that its computer  systems  will  function
properly with respect to dates in the year 2000 and  thereafter.  The total Year
2000 project is estimated to be immaterial to the financial statements. To date,
the  Company's  incremental  costs for  assessment  of the Year 2000 issue,  the
development of a  modification  plan, and the purchase of new software have been
insignificant.

         The majority of software  used by the Company is licensed  from various
software  providers  who are  currently  updating  our  programs to be Year 2000
compliant.  In-house  developed  programs  comprise a small portion of the total
software  utilized,  and the majority of these  programs are believed to be Year
2000 compliant.

         The project is estimated to be  completed  not later than  December 31,
1998,  which is prior to any  anticipated  impact on its operating  system.  The
Company believes, with modifications to existing software and conversions to new
software, the Year 2000 issue will not pose significant operational problems for
its computer  systems.  However,  if such  modifications and conversions are not
made,  or are not  completed  timely,  the Year 2000 Issue could have a material
impact on the operations of the Company.

                                       21

<PAGE>




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

         The  Company  has  initiated  formal  communications  with  all  of its
significant  suppliers and large  customers to determine the extent to which the
Company's  interface  systems are vulnerable to those third parties'  failure to
remediate their own Year 2000 Issues.  There is no guarantee that the systems of
other companies on which the Company's systems rely will be timely converted and
would not have an adverse effect on the Company's systems.

         The costs of the project and the date on which the Company  believes it
will  complete  the Year  2000  modifications  are  based on  management's  best
estimates,  which were derived utilizing numerous  assumptions of future events,
including the continued  availability  of certain  resources and other  factors.
However,  there can be no guarantee  that these  estimates  will be achieved and
actual results could differ materially from those anticipated.  Specific factors
that might cause such material  differences include, but are not limited to, the
availability  and cost of personnel  trained in this area, the ability to locate
and correct all relevant computer codes, and similar uncertainties.

Forward-Looking Information

         The foregoing  discussion in  "Management's  Discussion and Analysis of
Financial  Condition  and  Results  of  Operations"   contains   forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995, that reflect  management's current views with respect to future events and
financial  performance.   Such  forward  looking  statements  include,   without
limitation,  statements  regarding the Company's  future  capital  expenditures,
facility  closures,  service  demand and market  growth,  competitive  position,
expected  revenues from new contracts,  ability to meet cash  requirements,  and
other statements regarding  anticipated changes in the Company's Nasdaq listing,
future  plans  and  strategies,   anticipated  events  or  trends,  and  similar
expressions  concerning  matters that are not historical  facts. Such statements
involve risks and  uncertainties,  and there are certain  important factors that
could cause actual results to differ materially from those anticipated.  Some of
the important  factors that could cause actual results to differ materially from
those  anticipated  include,  but  are  not  limited  to,  economic  conditions,
competitive  factors,  increases in landfill charges, the outcome of competitive
bids,  unanticipated  costs in  connection  with  facility  closures,  and other
uncertainties,  all of which  are  difficult  to  predict  and many of which are
beyond the control of the Company.  Due to such  uncertainties and risk, readers
are cautioned not to place undue  reliance on such  forward-looking  statements,
which speak only as of the date hereof.

Effect of Inflation

         Inflation  has not had, and is not expected to have, a material  impact
upon the Company's operations.  If inflation increases, the Company will attempt
to increase its prices to offset its  increased  expenses.  No assurance  can be
given,  however, that the Company will be able to adequately increase its prices
in response to inflation.

Item 3. 
                          QUANTITATIVE AND QUALITATIVE
                          DISCLOSURES ABOUT MARKET RISK

         Not required pursuant to Item 305, General Instruction 1.

                                       22

<PAGE>




                           PART II - OTHER INFORMATION

Item 1.  Legal proceedings

         During June 1997, Kimmins Recycling Corp. ("KRC"),  St. Lucie County, a
political  subdivision of the State of Florida,  and the City of Fort Pierce,  a
municipality  organized under the laws of the State of Florida, were notified of
a class action lawsuit filed in the Nineteenth Judicial Circuit Court of Florida
by three residents of St. Lucie County.  This action challenged the propriety of
certain  contract  provisions  included  in KRC's  solid  waste  and  recyclable
materials collection service agreement with St. Lucie County, which allow KRC to
place  liens on the  property  of  delinquent  service  recipients.  The  court,
permitting KRC to file counterclaims  against the class members,  has with KRC's
consent certified the existence of a class.  KRC, the county,  and the city have
filed motions for summary judgement against the class plaintiff's  claim,  which
was heard on May 26, 1998. On June 12, 1998, the Court granted summary judgement
in favor of KRC,  the County,  and the City.  At December  31,  1997,  the total
amount of lien rights was approximately $474,000.

Item 2.  Changes in securities

           None

Item 3.  Defaults upon senior securities

           None

Item 4.  Submission of matters to a vote of security holders

           None

Item 5.  Other information

           Effective  with the close of business on June 10, 1998, the Company's
stock was delisted from the Nasdaq National Market because the Company could not
satisfy the market value public float  requirement  and was delinquent in filing
its  1997  Form  10-K  and its 1998  first  quarter  Form  10-Q.  The  Company's
application to Nasdaq to initiate listing with the OTC Bulleting  Service became
effective on August 17, 1998.

Item 6.  Exhibits and reports on Form 8-K

           (a) The following documents are filed as exhibits to this Form 10-Q:
                  27.1 - Financial Data Schedule - 1998 (for SEC use only)
                  27.2 - Financial Data Schedule - 1997(for SEC use only)

           (b) Reports on Form 8-K:

                  On May 27, 1998,  the Company filed a Form 8-K  announcing the
                  sale of operating assets related to the Jacksonville  facility
                  and certain operating assets related to the Miami facility. On
                  August 4, 1998,  the  Company  filed an amended  Form 8-K that
                  included the Asset Purchase Agreement relating to the sale.

                  On July 27, 1998,  the Company filed a Form 8-K announcing the
                  sale of the common stock of Kimmins  Recycling Corp. On August
                  4, 1998,  the Company  filed an amended Form 8-K that included
                  the Stock Purchase Agreement relating to the sale. On November
                  2,  1998 the  Company  updated  the 8-K to  include  pro-forma
                  information regarding the sale.

                                       23

<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.


                                    TRANSCOR WASTE SERVICES, INC.



                                    By:/s/ JOSEPH M. WILLIAMS
                                       Joseph M. Williams
                                       President


November 23, 1998

         Pursuant to the  requirements  of the  Securities  and  Exchange Act of
1934,  this report has been signed below by the  following  persons on behalf of
the registrant and in the capacities indicated on November 23, 1998.



Date:    November 23, 1998          By:/s/ JOSEPH M. WILLIAMS
                                       Joseph M. Williams
                                       President
                                       (Principal Executive Officer)

Date:    November 23, 1998          By:/s/ NORMAN S. DOMINIAK
                                       Norman S. Dominiak
                                       Treasurer and Chief Financial Officer
                                       (Principal Accounting and Financial
                                         Officer)

                                       24