SECURITIES AND EXCHANGE COMMISSION

                         Washington, D.C.  20549

                             FORM 10-K
(Mark One)

[ X ]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                  SECURITIES EXCHANGE ACT OF 1934
                                 
          For the fiscal year ended December 31, 1995

                               OR

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


                  Commission file number 1-1363


                        ENVIROSOURCE, INC.     
     (Exact name of Registrant as specified in its charter)


          Delaware                          34-0617390
  (State or other jurisdiction of        (I.R.S. Employer
  incorporation or organization)        Identification No.)


Five High Ridge Park, P.O. Box 10309, Stamford, CT  06904-2309
(Address of principal executive offices)            (Zip Code)

Registrant's telephone number, including area code:
          (203) 322-8333


Securities registered pursuant to Section 12(b) of the Act:

                                       Name of each exchange on
         Title of each class                which registered     

      Common Stock, par value $.05     The Pacific Stock Exchange
        per share                        Incorporated


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

The aggregate market value of the voting stock held by non-
affiliates of the registrant was $109,299,000 as of March 1,
1996(1).

The number of shares outstanding of the Registrant's Common
Stock as of the close of business on March 1, 1996 was
40,198,244.


-------------------------
(1) The market value of the Company's Class G $7.25 Cumulative
    Convertible Preferred Stock is based on a recent trade.

<PAGE>

                             PART I

ITEM 1.  Business.
         --------

The Company
-----------

    EnviroSource, Inc. (the "Company") supplies industrial
customers with long-term, specialized services, primarily the
recycling, handling, stabilization or landfilling of
environmentally sensitive wastes or by-products.  The Company's
principal business segments are the Industrial Environmental
Services segment, which provides metals reclamation, recycling
and other specialized services for the steel and aluminum
industries, and the Treatment & Disposal Services segment,
which provides hazardous waste treatment and disposal services
and waste stabilization services for industrial and governmental
customers.

    The Company conducts its operations exclusively through its
subsidiaries.  International Mill Service, Inc. and its
subsidiaries ("IMS") and IMSAMET, Inc. and its subsidiaries
("IMSAMET") constitute the Industrial Environmental Services
segment, and EnviroSource Treatment & Disposal Services, Inc.
("TDS"), through its Envirosafe and Conversion Systems
subsidiaries, constitutes the Treatment & Disposal Services
segment.  

    References herein to the Company include its subsidiaries as
well as its Ohio predecessor, NEOAX, Inc., except where the
context requires otherwise.  "Note" references herein are to
Notes to Consolidated Financial Statements appearing elsewhere in
this Report.

Development of the Company
--------------------------

    The Company's predecessor was originally incorporated in Ohio
in 1915 as White Motor Corporation.  Its name was changed to
Northeast Ohio Axle, Inc. when it emerged from reorganization
proceedings in 1983 and was changed again in May 1986 to NEOAX,
Inc. ("NEOAX").  In June 1987, NEOAX reincorporated in Delaware. 
On November 14, 1989, the Company changed its name to
EnviroSource, Inc. 

<PAGE>
    EnviroSource's present business units originally represented
a portion of the operations of IU International Corporation
("IU").  Early in 1988, the Company acquired IU with the goal of
establishing a substantial operating company centered primarily
on the Company's stable and growing steel industry business
relationships and prospects.  Between March 1988 and the end of
1991, the Company disposed of all the businesses it had owned
prior to the IU acquisition and virtually all of IU's operations
and assets other than the present Industrial Environmental
Services and Treatment & Disposal Services segments, completing
its transformation into an environmental services company.  

    During 1993 the Company completed a comprehensive
recapitalization (the "Recapitalization") designed to increase
the Company's liquidity and capital resources, improve operating
and financial flexibility, reduce interest expense and preferred
dividend requirements, and enhance the Company's ability to
pursue the growth opportunities in its businesses. The
Recapitalization included the sale of Common Stock to an
affiliate of Freeman Spogli & Co.("FS&Co.") and another investor
(collectively, the "Investors") and the purchase by the Investors
of certain equity securities from The Dyson-Kissner-Moran
Corporation ("DKM") and WM Financial Corporation ("WM
Financial").  The sale of stock and warrants to FS&Co. and
the subsequent related transfers of stock are hereinafter
referred to as the "FSC Transaction."  As a result of the FSC
Transaction, FS&Co. owns approximately 48% of the Common Stock of
the Company.

    In addition, in July 1993, the Company sold $220 million
principal amount of 9-3/4% Senior Notes Due 2003 (the "Senior
Notes").  A significant portion of the proceeds from the sale of
the Senior Notes was used to retire $150 million principal amount
of the Company's 14% Extendible Reset Senior Subordinated Notes
Due 1998 (the "Subordinated Notes").  See Note D for additional
information concerning the Recapitalization.

    During the fourth quarter of 1993 and throughout 1994 and
1995 the Company took a number of steps to reduce costs and
terminate unprofitable operations.  These steps included (i)
terminating certain recycling units, (ii) discontinuing efforts
to obtain a hazardous waste landfill permit in Pennsylvania and
(iii) reorganizing the Envirosafe and Conversion Systems
businesses into the new TDS business unit.  See Note C for
additional information concerning the 1993 restructuring.

<PAGE>

    To further reduce costs and increase profitability, in
February 1996, the Company announced a major reorganization of its
headquarters organization that is expected to save approximately
$3.5 million in 1996 and $5 million annually in years thereafter. 
The reorganization includes the closing of the Company's
corporate headquarters in Stamford, Connecticut and the TDS
headquarters in Horsham, Pennsylvania.  Activities of both
offices will be moved to IMS's offices in Horsham, Pennsylvania. 
Headcount will be reduced by approximately 50 persons, primarily
from TDS.  The Company expects to record charges of approximately
$4 million during 1996 for the reorganization, the majority of
which will be recorded in the first quarter of 1996.

Tax Loss Carryforwards
----------------------

    The Company has substantial federal income tax net operating
loss carryforwards.  Although the FSC Transaction produced an
"ownership change" (as defined in the Internal Revenue Code) that
could limit the future use of these carryforwards, based on a
comprehensive study of its overall federal tax position, the
Company believes that sufficient tax loss carryforwards will be
available, together with its other deferred tax assets, to enable
it to pay only federal alternative minimum tax, at an effective
rate of approximately 2%, through 1998.  In addition, the Company
expects to utilize its deferred tax assets to reduce
substantially its federal income tax payments for several years
thereafter.  See Note K. 

Business Segments
-----------------

    Industrial Environmental Services
    ---------------------------------

    Steel Industry Services.  The Company has served the steel
    -----------------------
industry for 60 years.  The Company believes it increases its
customers' productivity by providing cost-effective and reliable
on-site reclamation of steel and iron and a variety of other
specialized services that are essential to the efficient
functioning of steel mills.

    North America's steel mills operate in a highly competitive
environment.  Services that help to reduce their total process
costs are therefore of significant value.  IMS provides recycling
and metal recovery operations under long-term contracts at over
40 steel mill sites in North America, including integrated mills,
mini-mills and specialty mills.  Using specially designed
equipment, IMS provides a total recycling solution by processing
slag (a by-product of steel production), recovering valuable
metallics and selling the residual aggregate for road base and
other uses.  These services are economically and environmentally
attractive.  Moreover, the effective removal of slag on a

<PAGE>
continuous basis is critical to a steel mill's ability to remain
in operation.  

    The Company has successfully pursued a strategy of building
on its leadership position by offering an expanded range of
services that enhance mill productivity and provide IMS with
growth opportunities.  These services include processing blast
furnace iron scrap through an IMS-developed iron crushing
process, as well as specialized materials handling and surface
conditioning. IMS has enhanced the slab hauling process by using
rubber-tired carriers that straddle steel slabs to move them more
efficiently throughout the mill.  This service, currently in
place at two integrated steel mills, is significantly more
cost-effective than the traditional rail and crane systems.
IMS has also introduced a proprietary specialized steel slab
surface conditioning process (called scarfing) that helps its
customers increase product yields and improve product quality,
while gaining measurable cost savings.  This service is currently
provided at six steel mills. 
 
    IMS has a diversified customer base, with approximately 55%
of its revenues coming from integrated steel producers and 45%
from mini-mills and specialty mills.  IMS's largest site is at
USX Corporation's Gary Works, in Gary, Indiana, the largest
integrated steel mill in the U.S.  USX accounted for 16%, 19% and
18% of the Company's consolidated revenues in 1995, 1994 and 1993
respectively (including revenues attributable to services
performed by the Treatment & Disposal Services segment).  Long
term contracts governing the related services expire between 1997
and 2001.  Over the next several years, the maintenance of USX as
a customer will be material to the Company's consolidated
revenues and operating income. 

    Substantially all of IMS's services are provided on-site at
steel mills, using IMS employees and equipment.  IMS's services
are integrated with the operations of its customers, providing
for strong working partnerships.  If necessary, most equipment
can be relocated, but this has not often been required as
contracts are generally long-term and IMS has a history of high
renewal rates.

    Aluminum Industry Services.   Through its IMSAMET business
    --------------------------
units, the Company meets the aluminum industry's needs for
outsourcing, recycling and waste management in a number of ways. 
At its Idaho facility, the Company processes used aluminum
beverage cans ("UBCs") and aluminum dross and scrap for Kaiser
Aluminum and Chemical Corporation ("Kaiser") and other customers. 
In 1995, this modern and efficient facility processed over 250
million pounds of material, including approximately 2.4 billion
UBCs.  Due to the high energy requirements and costs of primary
aluminum production in the U.S., as well as IMSAMET's ability to
deliver aluminum in molten form, recycled aluminum is frequently
an attractive alternative for manufacturers such as Kaiser.

<PAGE>
    In addition to the Idaho dross operations, at facilities
located in Arizona (through a 70% owned partnership) and Utah,
the Company reclaims aluminum from dross, a by-product of the
aluminum production process.  The dross is loaded into rotary
furnaces where gas heat is applied along with a flux mixture
(salt and potash).  After the dross is melted, the molten metal
is cast into sows and then delivered to customers.  
 
   The Company also has a 50% interest in a Utah partnership,
Solar Aluminum Technology Services ("SALTS"), with Reilly
Industries, Inc. ("Reilly"), to recycle saltcake into marketable
aluminum metal concentrate, aluminum oxide and salt brine, using
a proprietary wet milling system.  Saltcake is a by-product
generated in the recovery of aluminum from dross. Improper
disposal of saltcake poses risks of groundwater contamination,
and the cost of disposal of saltcake in properly designed
landfills can be considerable.  

    Competition.  Competition in IMS's markets is based primarily
    -----------
on quality of service, reliability, technology and price.  In its
core steel reclamation business, IMS services customers
responsible for approximately one-third of total domestic steel
production.  IMS has one large competitor and several smaller
competitors.  The Company believes that IMS's leading market
position is based on its reliability, responsiveness to customer
needs, capital resources and breadth of expertise.     

    The majority of UBC recycling is performed by the aluminum
producers themselves, with IMSAMET having approximately 5% of the
UBC market.  There are approximately three major aluminum dross
processors other than IMSAMET in the U.S., as well as several
smaller competitors.  The Company also believes that its SALTS
joint venture is the only enterprise successfully recycling
saltcake on a commercial scale in North America.

    Treatment & Disposal Services
    -----------------------------

    TDS, through its Envirosafe and Conversion Systems business
units, has been dedicated to the safe, economical treatment and
disposal of industrial and hazardous wastes since 1976.  Through
its Envirosafe subsidiaries, TDS owns major commercial hazardous
waste treatment and disposal facilities in Ohio and Idaho.
Envirosafe services some of the country's largest chemical,
energy, automotive, aerospace, electronics, utility and steel
companies, as well as numerous government agencies.

    Envirosafe has approximately 4 million cubic yards of
permitted disposal capacity.  In 1992 Envirosafe received final
approval to expand its Ohio facility and in 1993 completed
construction of the first phase of a 2.6 million cubic yard
disposal cell.  The second phase of construction of this cell was
completed in December 1994 and approval to accept waste was
obtained in January 1995.  In late 1993, Envirosafe received
final approval to expand an active disposal cell at its Idaho
facility and completed construction of the second phase of such
cell.

<PAGE>
      In the last few years, the Company completed a number of
capital projects in order to maintain and enhance its competitive
position. These projects included a new state-of-the-art
stabilization and debris handling facility in Ohio and a
new debris handling facility and expanded stabilization capacity
in Idaho.  Enhanced stabilization capability has allowed the
Company to utilize its proprietary Super Detox(sm) technology for
the stabilization of electric arc furnace ("EAF") dust at each of
its Ohio and Idaho facilities.  See below for a discussion of
Super Detox.  The debris handling facilities have enabled
Envirosafe to respond to requirements for the processing of
contaminated debris promulgated under RCRA.  In addition, a new
rail transfer facility was opened in Idaho in May 1993 and was
upgraded in 1995.  New rail service into the Ohio facility is
expected to be available during the second half of 1996.

    Envirosafe's Ohio and Idaho facilities hold operating
permits issued by state and federal environmental agencies under
the Resource Conservation and Recovery Act, as amended ("RCRA"),
that require renewal and modification from time to time.  The
Company expects that it will obtain the renewals and
modifications to its permits that it requires to continue to
provide landfill capacity in its approved disposal cells well
into the next decade.  The Company's hazardous waste treatment
and disposal services business is somewhat seasonal, with the
first quarter of the year tending to be slower depending
primarily on winter weather conditions.

    Envirosafe and its competitors and customers are subject to a
complex, evolving array of federal, state and local environmental
laws and regulations.  Such requirements not only can affect the
demand for Envirosafe's services, but could also require the
Company to incur significant costs for such matters as facility
upgrading,  remediation or other corrective action, facility
closure and post-closure maintenance and monitoring.  It is
possible that the future imposition of such requirements could
have a material adverse effect on TDS's results of operations or
financial condition, but the Company believes that the
Consolidated Financial Statements appropriately reflect all
presently known compliance costs in accordance with generally
accepted accounting principles.  Stringent interpretation of
environmental laws and regulations governing hazardous waste
treatment and disposal facilities by state and federal regulators
also subjects Envirosafe to violations and fines from time to
time, none of which has been material to the Company.  In fact,
the Company believes that it has one of the best environmental
compliance records in the industry.

<PAGE>
    During 1993, TDS entered into a service contract to
operate and maintain a captive landfill for a domestic steel
mill.  TDS is currently exploring additional opportunities for
providing captive landfill services.  

    TDS's Conversion Systems unit provides electric utilities
with turn-key design, engineering and installation of systems for
the stabilization of wet scrubber effluent and boiler ash
residues produced at coal-fired power plants.  These systems
convert the sludge resulting from wet scrubber removal of sulfur
dioxide from power plant emissions into a concrete-like material
suitable for environmentally responsible landfilling.  In
response to Phase II of the "Acid Rain" provisions of the Clean
Air Act Amendments of 1990 additional opportunities may be
available to Conversion Systems.  Although it is not yet clear
how many power plants will install wet scrubbers and elect or be
required to include stabilization units, the Company believes
that its technology will continue to provide the utility industry
with a cost-effective and environmentally desirable waste
management solution. The Company continues to explore
opportunities for utilizing its flue gas desulfurization sludge
stabilization expertise in the European market as well. 

    Conversion Systems also is the sole licensee of a proprietary
technology (Super Detox) for stabilizing electric arc furnace
dust - a listed hazardous waste under RCRA generated by steel
mills - that renders the EAF dust suitable for landfilling in
non-hazardous landfills and for possible reuse.  TDS currently
operates an EAF dust stabilization facility on-site at the
largest domestic mini-mill, and provides Super Detox
stabilization for EAF dust at each of its regional Envirosafe
Ohio and Idaho facilities. During 1994 and 1995, TDS entered into
a number of new contracts to receive and process EAF dust at its
Envirosafe facilities.  TDS is actively marketing this process to
other U.S. mini-mills.

    In June 1995, Conversion Systems received from the U.S.
Environmental Protection Agency ("USEPA") a generic delisting for
Super Detox stabilized EAF dust, which allows TDS to handle EAF
dust treated through its proprietary process as a non-hazardous
waste.  The generic delisting status for the process will save
TDS and its customers the time and expense involved in
petitioning USEPA on a facility-by-facility basis for delisting
status.  USEPA, as well as the Illinois Department of
Environmental Regulation, previously has granted site specific
delistings for this process.  In addition, in November 1995, TDS
received from the Idaho Department of Health and Welfare a
generic delisting for Super Detox stabilized EAF dust which
essentially has the same effect as the USEPA delisting.  The
Company believes that the Super Detox technology provides an
environmentally safer and more cost-effective solution than the
off-site thermal process currently employed by a large portion of
the mini-mill industry.

<PAGE>
    Horsehead Resource Development Company, Inc. ("Horsehead"), a
competitor of TDS in the EAF dust management business, has filed
a petition for review of the USEPA delisting.  The Company
believes that such appeal is without merit and ultimately will be
denied.   

    Competition.  The Company's hazardous waste treatment and
    -----------
disposal business is characterized by intense competition. 
Envirosafe has a limited number of competitors in the off-site
hazardous waste landfill business (there are 19 active, permitted
hazardous waste landfills in the U.S.), only two of which operate
more than two landfills, and several competitors engaged in the
treatment or stabilization of hazardous waste.  Competition in
this industry is based on service, site and process integrity and
the all-in cost of disposal, which includes treatment,
stabilization and transportation costs and taxes.  Expanded use
of rail services and additions to stabilization services will
further improve Envirosafe's competitive position.  The market
for hazardous waste services generally is geographically broad,
but is narrowed depending on factors such as the types of waste a
facility is permitted to accept, the types of services offered by
a facility, the cost of operation of a facility and the proximity
of the facility to the customer.

    TDS's principal competition in electric arc furnace flue dust
stabilization is Horsehead, a thermal metal recovery processor,
which has accounted for approximately 60% of the U.S. market. 
The market for wet scrubber stabilization units has been dormant
and it is difficult to determine the number and nature of
Conversion System's viable competitors.  However, TDS expects to
encounter increased competition through the decade from wet
scrubber manufacturers as well as from wet scrubber technologies
and processes that do not, or purport not to, require sludge
stabilization units.  Competition in these businesses is based
primarily on price, quality of service, technical expertise and
the environmental integrity of the process.

Segment Data
------------

    See Note J for information concerning revenues and operating
income by segment for the years ended December 31, 1995, 1994 and
1993 and the percentage of total revenues contributed by each
class of service of the Company's continuing operations for each
such year.

<PAGE>
Employees
---------

    At March 1, 1996, the Company employed approximately 1,800
persons.  A majority of the hourly employees in the Industrial
Environmental Services segment are covered by site-specific
collective bargaining agreements with various unions, including
the International Union of Operating Engineers, the United
Steelworkers and the International Brotherhood of Teamsters. 
Several of these contracts will be renegotiated in 1996.  All
other contracts will be renegotiated in 1997 or thereafter. 
Approximately 12% of the Treatment & Disposal Services segment
hourly employees are also unionized.  The Company believes it has
a good working relationship with its employees.

ITEM 2.  Properties.
         ----------

Industrial Environmental Services
---------------------------------

    IMS has operations providing metal recovery and other
services at steel mills throughout the continental United States
and in Canada.  Equipment located at the sites operated by IMS
and its subsidiaries includes prefabricated storage, shop and
office structures, pot carriers, slab haulers, loaders, railcars,
cranes, trucks, metal recovery plants and crushers and other
specialized mobile and stationary equipment used in
metal-recovery operations and industrial service work, most of
which is owned.  IMSAMET owns its UBC and dross recycling plant
in Idaho and leases land for its dross processing facility in
Utah.  Through a partnership, IMSAMET leases land for its
aluminum dross recovery plant in Arizona. SALTS owns the property
on which it conducts its operations in Utah.  The business units
in this segment lease office space in Arizona and Pennsylvania.

    Management believes that the physical facilities for the
Company's Industrial Environmental Services segment are adequate
for its operations and provide sufficient capacity to meet their
anticipated requirements.  The metal recovery and slag processing
installations are generally located at specific customer
facilities and are adequate to handle current levels of customer
operations and anticipated future needs for current customers.

Treatment & Disposal Services
-----------------------------    

    Envirosafe owns substantially all of the land, buildings and
equipment used in its treatment and disposal operations in
Oregon, Ohio and near Grand View, Idaho.  Conversion Systems owns
the building and equipment at one stabilization facility in
Illinois and one in Pennsylvania and leases land for both
facilities.  TDS leases office space in Pennsylvania, Ohio and
Idaho.  Assuming the timely completion of subsequent phases under
existing permit authority, Envirosafe expects to maintain ample
hazardous waste disposal capacity into the next decade. 
Management believes that the physical facilities for TDS are
adequate for its operations and provide sufficient capacity to
meet its anticipated requirements.  

<PAGE>
Other
-----

    The Company's corporate headquarters presently are located in
Stamford, Connecticut in leased premises.  See Development of the
Company in Item 1 for a description of the Company's plans to
relocate the corporate headquarters to Horsham, Pennsylvania
during 1996.

ITEM 3.  Legal Proceedings.
         -----------------

    The Company is a party to litigation and proceedings arising
in the normal course of its present or former businesses, and in
several instances the Company has been named as a potentially
responsible party regarding properties that could be subject to
remedial action under RCRA or the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended.  As
to such matters, the Company is not subject to any administrative
or judicial order requiring material expenditures, and the
Company has determined that it is not likely to be subject to
sanctions or held responsible for material remediation
expenditures.  In the opinion of management, the outcome of the
matters described in this paragraph will not have a material
adverse effect on the Company's financial condition or results of
operations.

ITEM 4.  Submission of Matters to a Vote of Security Holders.
         ---------------------------------------------------
        
    Not applicable.




                  *               *               *     


<PAGE>
Executive Officers of the Company
---------------------------------

    The Company's executive officers are as follows:


Name                    Age       Position

Ronald P. Spogli        47        Chairman of the Board; Director

Louis A. Guzzetti, Jr.  56        President and Chief Executive
                                  Officer; Director

George E. Fuehrer       47        Senior Vice President, Planning

Aarne Anderson          55        Vice President, Taxes

William B Davis         45        Vice President and Treasurer

Jerrold I. Dolinger     49        Vice President, Corporate
                                  Development

Christina E. Huben      40        General Counsel and Secretary

James C. Hull           58        Vice President and Chief
                                  Financial Officer 

George T. Milano        47        Vice President and Controller


    Officers are elected annually and hold office until their
successors are elected and qualified.

    Ronald P. Spogli became a director and Chairman of the Board
of the Company in May 1993.  Mr. Spogli is one of the FS&Co. (a
private investment firm) designees appointed to the Board of
Directors on May 13, 1993.  He is a founding partner of FS&Co. 
Mr. Spogli is also a director of Mac Frugal's Bargains Close-Outs
Inc., Orchard Supply Hardware Stores Corporation and Buttrey Food
and Drug Stores Company.  

    Louis A. Guzzetti, Jr. has been a director and President and
Chief Executive Officer of the Company since October 1986.  From
June 1983 until April 1986, Mr. Guzzetti was employed by United
Brands Company ("United Brands"), a diversified international
company, serving as its Executive Vice President and Chief
Administrative Officer from June 1983 until August 1985 and as
President and Chief Executive Officer of its United Fruit Company
subsidiary from October 1984 until April 1986.  He was also a 
director of United Brands from August 1984 until June 1986. 

<PAGE>
    George E. Fuehrer has been employed by the Company since 1982
and has served as its Senior Vice President, Planning since May
1989.  Mr. Fuehrer also has served as President of IMSAMET since
November 1995.  He joined IMSAMET in 1994 as Executive Vice
President.  From June 1988 until May 1989 he served as Senior
Vice President - Finance of the Company. 

    Aarne Anderson has been employed by the Company since May
1980, except for the period from August 1983 through April 1984
during which he served as a consultant to the Disposition Assets
Trustee in the Company's reorganization.  Mr. Anderson was
elected Vice President, Taxes in August 1985. 

    William B. Davis was elected Vice President of the Company in
February 1995 and has been Treasurer of the Company since
September 1991.  Mr. Davis joined the Company in July 1987 as
Assistant Treasurer.

    Jerrold I. Dolinger joined the Company as a Vice President in
May 1988 and has served as Vice President, Corporate Development
since August 1988.  

    Christina E. Huben has been the Company's General Counsel and
Secretary since October 1993.  Ms. Huben joined the Company as
Corporate Counsel in January 1989 and became Assistant General
Counsel in September 1991.

    James C. Hull has been the Company's Vice President and Chief
Financial Officer since May 1989, when he joined the Company.   

    George T. Milano was elected Vice President in June 1988 and
has served as the Company's Controller since May 1987.

<PAGE>

                              PART II


ITEM 5.  Market for the Registrant's Common Equity and Related
         -----------------------------------------------------
         Stockholder Matters.
         -------------------

    The Company's Common Stock trades on The Nasdaq National
Market tier of The Nasdaq Stock Market under the symbol "ENSO"
and on the Pacific Stock Exchange under the symbol "ES".  The
following table sets forth the high and low sales prices for the
Common Stock for each of the calendar quarters of 1995 and 1994,
based upon prices supplied by The National Association of
Securities Dealers ("NASD").

<TABLE>
<CAPTION>
                                1995                1994
                          High        Low      High      Low
<S>                      <C>         <C>      <C>       <C>
First Quarter            $4.50       $3.25    $4.50     $3.125 
Second Quarter            4.75        4.00     3.75      2.75
Third Quarter             4.625       2.875    4.125     2.797
Fourth Quarter            3.25        2.50     3.75      3.125

</TABLE>

    The Company is not currently in technical compliance with one
of the requirements for continued designation of its Common Stock
as a Nasdaq National Market tier security.  The NASD indicated
to the Company in March 1992 that it did not intend to commence
formal proceedings to remove the Common Stock from the Nasdaq
National Market tier.  It is possible that in the future the NASD
could seek to do so, but the NASD has a procedure for seeking
exemptions from its requirements, which the Company would seek to
utilize if necessary.  If the Common Stock were removed from the
Nasdaq National Market tier, it would continue to be eligible for
inclusion in the regular Nasdaq inter-dealer quotation system.

    The Company has not paid a cash dividend on its Common Stock
since the confirmation of its plan of reorganization in November
1983 and has no present plan to pay cash dividends.  The Company
is currently prohibited from paying cash dividends on its Common
Stock by its Certificate of Incorporation and its bank credit
agreement.

    At March 1, 1996 the Company had approximately 3,200 
holders of record of its Common Stock.

<PAGE>
ITEM 6.   Selected Financial Data.  
          -----------------------

     The information presented below should be read in conjunction with the
Consolidated Financial Statements and Notes thereto, including Notes B and C
which describe the unusual items.

<TABLE>
<CAPTION>

                                             1995      1994         1993       1992       1991   
                                             ----      ----         ----       ----       ----
                                             (In thousands, except for per share amounts)

<S>                                         <C>        <C>        <C>        <C>        <C>
Revenues                                    $264,684   $259,515   $271,026   $232,652   $223,902 
Costs and expenses                           224,775    219,796    243,873    206,307    204,957 
Unusual items, net (1)                        (2,457)               18,500                       
                                             -------    -------    -------    -------    ------- 

Operating income                              42,366     39,719      8,653     26,345     18,945 

Interest income                                1,146        992      1,185      1,069      1,576 
Interest expense                             (27,400)   (25,372)   (28,863)   (33,653)   (35,856)
                                             -------    -------    -------    -------    ------- 
                                              16,112     15,339    (19,025)    (6,239)   (15,335)
Income tax expense                             5,608      4,280      2,549      1,299      1,483 
Minority interests                                                                           566 
                                             -------    -------    -------    -------    ------- 
Income (loss) before extraordinary loss
  and cumulative effect of accounting change  10,504     11,059    (21,574)    (7,538)   (17,384)
Extraordinary debt extinguishment loss          (806)              (21,930)                      
Cumulative effect of income tax
  accounting change                                                 (2,302)                      
                                             -------    -------    -------    -------    ------- 

Net income (loss)                           $  9,698   $ 11,059   $(45,806)  $ (7,538)  $(17,384)
                                             =======    =======    =======    =======    ======= 

Income (loss) applicable to 
  common shares and equivalents             $  7,959   $ 10,457   $(48,988)  $(11,633)  $(22,075)

Income (loss) per share before
    extraordinary loss and
    cumulative effect adjustment            $    .22   $    .26   $   (.73)  $   (.52)  $  (1.51)
Net income (loss) per share                 $    .20   $    .26   $  (1.44)  $   (.52)  $  (1.51)

Average common shares and equivalents         40,527     40,292     34,009     22,251     14,572 



Total assets                                $449,682   $450,178   $427,245   $444,547   $450,852 

Working capital deficiency (2)              $(34,099)  $ (8,275)  $(17,396)  $ (5,138)  $ (5,120)

Debt (noncurrent)                           $275,158   $260,423   $235,842   $235,668   $229,118 

Redeemable preferred stock (noncurrent)           -    $ 31,396   $ 38,711   $ 43,850   $ 42,070 

Stockholders' equity                        $ 32,604   $ 24,521   $ 14,217   $ 20,549   $ 10,695 

</TABLE>

NOTES

(1) After related income taxes, the 1995 net unusual items reduced net income by
    approximately $1 million or $.02 per share, and the 1993 net unusual items
    reduced net income by $17.6 million or $.52 per share.  See Notes B and C.

(2) The 1995 working capital deficiency includes $33.1 million of Class G
    redeemable preferred stock that is due July 15, 1996 and $5 million of bank
    revolving credit borrowings that were voluntarily repaid in January 1995.
    The redemption of the Class G preferred stock will be financed with
    borrowings under the Company's bank credit agreement.

<PAGE>
ITEM 7.        Management's Discussion and Analysis of Financial
               -------------------------------------------------
               Condition and Results of Operations.
               -----------------------------------

Results of Operations
---------------------
<TABLE>
<CAPTION>

1995 Versus 1994
----------------

                                                      1995
                               Year ended         better (worse)
                               December 31,         than 1994     
                             ------------------   ---------------
                              1995     1994        Amount   % 
                              ----     ----        ------  ---
                                   (Dollars in thousands)
<S>                         <C>       <C>        <C>       <C>
Revenues
    Industrial Environmental 
         Services           $222,043  $206,477   $ 15,566   8%  
    Treatment & Disposal 
         Services             42,641    53,038    (10,397) (20%) 
                             -------   -------    -------       
                            $264,684  $259,515   $  5,169   2%  
                             =======   =======    ======= 

Gross Profit
    Industrial Environmental 
         Services           $ 59,172  $ 55,996   $  3,176   6%  
    Treatment & Disposal 
         Services              9,129    14,936     (5,807) (39%) 
                             -------   -------    ------- 
                            $ 68,301  $ 70,932   $ (2,631) (4%) 
                             =======   =======    ======= 

Operating Income
    Industrial Environmental 
         Services           $ 44,780  $ 39,304   $  5,476  14%  
    Treatment & Disposal 
         Services              1,611     6,339     (4,728) (75%) 
    Corporate headquarters    (6,482)   (5,924)      (558) (9%) 
    Unusual items, net         2,457                2,457 
                             -------   -------    -------  
                            $ 42,366  $ 39,719   $  2,647   7%  
                             =======   =======    ======= 
</TABLE>

    Industrial Environmental Services revenue increased
primarily due to high production volumes resulting from generally
favorable conditions in the steel and aluminum industries and the
start-up of a new dross processing plant in Utah.  Treatment &
Disposal Services revenue decreased due to a reduction in
landfill disposal volume and lower landfilling prices for
hazardous waste clean-up projects, resulting from continuing
depressed market conditions.  These decreases were partially
offset by a higher proportion of higher-priced tonnage requiring
stabilization prior to landfilling.  

<PAGE>
    Industrial Environmental Services gross profit improvements
paralleled the revenue increases except for a loss at the Utah
plant, which started up late in 1994.  The Treatment & Disposal
Services gross profit reduction was primarily due to lower
landfill profits, which paralleled the revenue reduction.  That
segment's 1995 gross profit benefited from a $1 million
reduction of expected closure costs at an inactive landfill site. 
Reduced profits from long-term contracts to design and supply
scrubber sludge stabilization systems for electric utilities were
offset by improved profits from other services.  Future profits
from such long-term contracts ($2.6 million in 1995 and $3.7
million in 1994) depend entirely upon securing additional
contracts.  During 1995 the Treatment & Disposal Services segment
embarked on a comprehensive marketing program to attract
additional landfill volume by treating steel mill electric arc
furnace dust with its proprietary Super Detox technology. 
Treatment & Disposal Services began processing this waste stream
at its landfills in 1995 and it expects to handle increasing
volumes in 1996 and subsequent years.

    Selling, general and administrative expenses were $2.8
million lower in 1995.  Industrial Environmental Services' costs
were $2.3 million lower in 1995 due primarily to headcount
reductions.  The $1.1 million improvement at Treatment & Disposal
Services resulted principally from headcount reductions, lower
marketing costs and lower performance-based compensation. 
Corporate headquarters costs increased by $.6 million, due to
litigation expenses.

    UNUSUAL ITEMS, NET.  During 1995 the Company favorably
resolved a number of liabilities resulting from its 1988
acquisition of IU International Corporation, primarily
liabilities for insurance matters.  The benefit of these
favorable developments was partially offset by additional charges
for other matters arising from the IU International acquisition. 
The net credit to income in 1995 amounted to $3.6 million, before
taxes.  The Company also increased its estimate of costs to
complete the final steps of its 1993 restructuring by $.2 million
and incurred $1 million of termination costs for additional
headcount reductions during 1995.  After related income tax
expense of $3.5 million, these items reduced net income by
approximately $1 million or $.02 per share.

    Interest expense increased $2 million, primarily due to a
higher average debt level.

    Total income tax expense increased $1.3 million primarily
because of the disproportionately high federal taxes not payable
in cash related to the aforementioned net unusual items,
partially offset by lower state taxes payable.  

    In 1995 the Company entered into a new five-year bank credit
facility, and recorded a $.8 million extraordinary debt
extinguishment loss to write off the unamortized issuance costs
of its previous bank credit agreement.

<PAGE>
    Due to the factors described above, 1995 net income, after
deducting the $.8 million extraordinary loss and the $1 million
adverse after-tax effect of the unusual items, was $9.7 million
compared with $11.1 million in 1994.

    Class G preferred stock dividend requirements in 1995 were
$.5 million lower than in 1994, due to the retirement of shares
during 1994.  1994 benefited from a $1.7 million gain from
purchasing and retiring 100,800 shares of Class G redeemable
preferred stock, which amounted to $.04 per share.

    The effects of accounting standards which become effective in 1996 (Note A)
are not expected to be material.  The impact of inflation on revenues and
results of operations has not been significant.


Federal Taxes Not Payable in Cash
---------------------------------

    Income tax expense includes federal tax expense that will
never be paid in cash.  This unusual situation occurs because of
the origins of most of the Company's tax loss carryforwards and
other deferred tax assets.

    As described further in Note K, the Company has substantial
federal income tax net operating loss carryforwards, together
with additional deferred tax assets, that will become available
to reduce future income taxes as the underlying book/tax
differences become deductible for tax purposes.  To the extent
that the Company's deferred tax assets arose either prior to its
1983 reorganization or from its 1988 IU International Corporation
acquisition, the Company is required to charge income tax expense
and credit the tax benefits from utilizing these deferred tax
assets to either capital in excess of par value or goodwill. 
However, the resulting income tax expense will never be paid in
cash; this amounted to $4.3 million or $.11 per share in 1995 and
$1.7 million or $.04 per share in 1994.

    Because it has very substantial federal income tax net
operating loss carryforwards and other deferred tax assets, the
Company expects to pay only federal alternative minimum tax, at
an effective rate of approximately 2%, through 1998.  In
addition, it expects to utilize its remaining deferred tax assets
to reduce substantially its federal income tax payments for
several years thereafter.

<PAGE>

<TABLE>
<CAPTION>

1994 Versus 1993
----------------

                                                    1994
                            Year ended          better (worse)
                            December 31,          than 1993     
                          ---------------       ---------------
                             1994      1993       Amount    % 
                             ----      ----       ------   ---
                                   (Dollars in thousands)
<S>                         <C>       <C>        <C>       <C>
Revenues
    Industrial Environmental 
         Services           $206,477  $197,268   $  9,209   5%  
    Treatment & Disposal 
         Services             53,038    73,758    (20,720) (28%) 
                             -------   -------    ------- 
                            $259,515  $271,026   $(11,511) (4%) 
                             =======   =======    ======= 

Gross Profit
    Industrial Environmental 
         Services           $ 55,996  $ 49,035   $  6,961  14%  
    Treatment & Disposal 
         Services             14,936    13,480      1,456  11%  
                             -------   -------    ------- 
                            $ 70,932  $ 62,515   $  8,417  13%  
                             =======   =======    ======= 

Operating Income
    Industrial Environmental 
         Services           $ 39,304  $ 31,926   $  7,378  23%  
    Treatment & Disposal 
         Services              6,339     2,331      4,008  172%  
    Corporate headquarters    (5,924)   (7,104)     1,180  17%  
    Restructuring charge, net          (18,500)    18,500         
                             -------   -------    ------- 
                            $ 39,719  $  8,653   $ 31,066 359%  
                             =======   =======    ======= 

</TABLE>
    The Treatment & Disposal Services revenue decrease resulted
from a $20.4 million decline in revenues from long-term contracts
to design, supply and construct scrubber sludge stabilization
systems for electric utilities, because 1993 included billings
for major equipment installations under two contracts that were
substantially completed in 1994.  The effects of reduced
hazardous waste landfilling prices, caused by extremely
competitive industry conditions, were largely offset by an
increased proportion of higher-priced waste streams that required
stabilization before landfilling.  The Industrial Environmental
Services increase was attributable to increased production
volumes at steel mill customers and to the significant
improvement in aluminum industry conditions during the second
half of 1994 that resulted in increased prices and volume.  These
increases were partially offset by the absence of revenue ($3.9
million in 1993) from operations that were terminated as part of
the 1993 restructuring.

    The Industrial Environmental Services gross profit increase
was principally due to the higher production volumes of steel
mill customers, the improved conditions in the aluminum industry
(which more than offset start-up costs at the new Utah dross
processing plant) and the absence of losses ($1.8 million in
1993) from operations that were terminated as a part of the 1993
restructuring.  Treatment & Disposal Services landfilling volumes
and gross profits were sharply lower during the first half of
1994, primarily due to severe winter weather conditions that
slowed environmental clean-up activity.  Most of the volume
decline was recovered during the second half of the year.  That,

<PAGE>
coupled with the benefits of the 1993 restructuring, stimulated a
significant recovery of gross profit despite continued
competitive industry conditions and higher costs associated with
waste streams requiring stabilization.  Treatment & Disposal
Services' other operations also improved throughout the year, due
partly to the absence of losses ($.9 million in 1993) from
operations that were terminated in the 1993 restructuring and
particularly from profits on a long-term stabilization system
contract that commenced in the middle of the year.  

    Selling, general and administrative costs decreased $4.1
million, primarily due to savings resulting from headcount
reductions and other steps taken in the 1993 restructuring.

    Due to the factors described above, operating income
increased $12.6 million (46%), before subtracting an $18.5
million net restructuring charge from 1993 operating income.  See
Notes B and C.

    Interest expense decreased $3.5 million, primarily due to
the 1993 recapitalization.  See Note D.  The recapitalization
also increased by 18% the average shares of common stock
outstanding.

    Due to the factors described above, 1994 net income was
$11.1 million compared with a 1993 net loss of $45.8 million. 
The 1993 loss was $4 million before all the one-time charges: 
$17.6 million net after-tax restructuring charge, $21.9 million
debt extinguishment loss and $2.3 million cumulative effect of a
tax accounting change.  The status of the 1993 restructuring is
discussed separately below.

    Preferred stock dividend requirements were lower in 1994
than in 1993 due to the 1993 exchange of the Class H preferred
stock for common stock and retirements of Class G preferred stock
during 1994. In 1994 the Company also recorded a $1.7 million
gain from purchasing and retiring 100,800 shares of Class G
preferred stock.  

    The impact of inflation on revenues and results of
operations has not been significant.

1993 Restructuring
------------------

    In 1993 the Company recorded a $22 million restructuring
charge to (i) terminate unprofitable recycling units, (ii)
discontinue efforts to obtain a Pennsylvania hazardous waste
landfill permit, and (iii) reorganize the Envirosafe and
Conversion Systems businesses into the Treatment & Disposal
Services business segment.  The discontinued activities incurred
1993 operating losses and costs of $3.3 million, in addition to
the restructuring charge.  The restructuring charge included $12
million of expected cash costs, which were increased by $.2
million in 1995.  The expected cash costs and developments
through December 31, 1995 have been as follows (in millions):

<PAGE>
<TABLE>
<CAPTION>

                          Expected  Costs    Changes in   Estimated
                            Cash   Incurred  Estimates    Remaining
                           Costs   To Date   1994   1995    Costs     
                          -------  -------   ----   ----  ---------

<S>                      <C>     <C>     <C>     <C>     <C>           
Termination of two flue 
    dust recycling units 
    and other unprofitable 
    units                $  6.3  $ (5.3) $   .3  $   .4  $  1.7 

Withdrawal of Pennsylvania
    permit application and
    sale of landfill site   1.8     (.2)   (1.1)    (.5)      - 

Organization of the 
    Treatment & Disposal 
    Services business 
    segment                 2.8    (2.9)     .2       -     0.1 

Other restructuring costs   1.1    (2.0)     .6      .3       -  
                         -------  ------- ------ -------  ------- 
                         $ 12.0  $(10.4) $   -   $   .2  $  1.8 

</TABLE>
    The changes in estimates shown above occurred primarily
because cash costs for the withdrawal of the Pennsylvania permit
application and the sale of the landfill site were lower than
anticipated and severance and termination costs were higher than
anticipated.  Overall severance and termination costs increased
by $.9 million in 1994 and $.3 million in 1995, to a total of
$3.3 million, principally because 15 (11%) more positions, at
higher salary levels, were eliminated than originally
anticipated.  In addition, waste processing and disposal costs
for the flue dust recycling units have been higher than
originally anticipated.  Although the decommissioning of the
units was completed by the end of 1995, certain other aspects of
the shut-downs were not yet settled.  


1996 Reorganization 
-------------------

    In early 1996 the Company initiated a further productivity
improvement and cost reduction program.  As part of this program,
the Company's Stamford, Connecticut headquarters and Treatment &
Disposal Services' Horsham, Pennsylvania headquarters both will
be closed by mid-year and their activities moved to the
International Mill Service headquarters, also in Horsham,
Pennsylvania.  Approximately 50 positions will be eliminated as a
result of the reorganization, mostly in the Treatment & Disposal
Services segment.  

    To cover the cost of these and related changes, the Company
expects to record restructuring and relocation charges during
1996 of approximately $4 million, most of which will be recorded
in the first quarter.  As a result of the reorganization, the
Company expects to realize ongoing cost savings of approximately
$5 million per year.  Savings of at least $3.5 million are 

<PAGE>
expected in 1996.  The consolidation of the Corporate,
International Mill Service and Treatment & Disposal Services
staffs under one roof will also enhance the Company's ability to
expand the range and volume of environmental and specialized
material handling services it provides to the U.S. steel
industry, its largest customer base.


Liquidity and Capital Resources
-------------------------------

    The Company's liquidity requirements arise primarily from
the funding of its capital expenditures, Treatment & Disposal
Services trust fund payments, working capital needs and debt
service obligations.  Historically, the Company has met such
requirements with cash flows generated by operations and with
additional debt financing.  

    In addition, the Company's Class G redeemable preferred
stock is due for redemption on July 15, 1996.  Such redemption,
including accrued dividends, will be financed with $34.1 million
of borrowings under the Company's new $100 million bank credit
facility.  The redemption has been guaranteed with a letter of
credit that is outstanding under the bank credit facility.

    The Company expects 1996 capital expenditures of $20 to $25
million, primarily for equipment replacements.  There are $4.4
million of scheduled debt repayments in 1996.

    Treatment & Disposal Services' landfill permits require it
to fund closure and post-closure monitoring and maintenance
obligations by making essentially nonrefundable trust fund
payments.  These payments amounted to $27.1 million in the three
years 1993 through 1995.  However, based on current regulations
and permitted capacity, remaining payments are expected to amount
to less than $1 million annually through 1998.

    The consolidated balance sheet reflects negative working
capital of $34.1 million at December 31, 1995.  However,
excluding $33.1 million for the Class G redeemable preferred
stock and $5 million of bank revolving credit borrowings that the
Company elected to repay in January 1996, working capital was a
positive $4 million.  

    On March 15, 1995, a multiemployer pension plan contacted
the Company concerning a potential claim against the Company for
deficiencies in the payment of withdrawal liabilities by a
subsidiary that was sold by IU International Corporation prior to
the Company's acquisition of IU International in 1988.  See Note
O.  The Company believes any such claim is unwarranted and, if
such claim were asserted, would contest any such claim
vigorously.  The Company believes it will ultimately prevail on
the merits.  However, under the Multiemployer Pension Plan
Amendments Act of 1980, the federal statute governing such plans,
the plan trustees could require the Company to make substantial
monthly payments before any issues are arbitrated or litigated. 
If onerous monthly payments are imposed by the plan, the Company
will take any and all actions it deems necessary and appropriate 

<PAGE>
to protect itself until the matter can be arbitrated and/or
litigated on its merits.  The Company continues to believe that
the underlying facts and circumstances support a conclusion that
these matters will be resolved with no material adverse effect on
its financial condition.  However, the resolution of such
matters, which potentially could take place in the current fiscal
year, could result in a charge that is material to results of
operations and cash flows in a single accounting period.

    The bank credit facility provides $100 million of revolving
credit borrowing and letter of credit capacity, declining by
$12.5 million in each of January 1999 and 2000 and terminating on
January 2, 2001.  At December 31, 1995, $44 million of revolving
credit borrowings and $43.4 million of standby letters of credit
were outstanding, including the $34.1 million letter of credit
guaranteeing redemption of the Class G redeemable preferred
stock.  In January 1996 $5 million of the outstanding borrowings
were repaid.

    Cash on hand, funds from operations and borrowing capacity
under the bank credit facility are expected to satisfy the
Company's normal operating and debt service requirements.

    Because its businesses are environmentally-oriented, and
therefore highly regulated, the Company is subject to violations
alleged by environmental regulators and, occasionally, fines. 
Such matters have not had and are not expected to have a material
impact on the Company's business.  Environmental compliance is
discussed in Note O.

<PAGE>
ITEM 8.     Financial Statements and Supplementary Data.
            -------------------------------------------

    See the financial statements and schedules attached hereto
and listed in Item 14(a)(1) and (a)(2) hereof.  


ITEM 9.     Changes in and Disagreements with Accountants on
            Accounting and Financial Disclosure.
            -------------------------------------------------

    Not applicable.

<PAGE>
                                 PART III


ITEM 10.    Directors and Executive Officers of the Company.
            -----------------------------------------------
       
    Reference is made to the information set forth under the
headings (i) "Election of Directors" and "Compliance with Section
16(a) of the Securities Act of 1934" in the Company's Proxy
Statement to be filed pursuant to Regulation 14A under the
Securities Act of 1934 within 120 days after December 31, 1995
and (ii) "Executive Officers of the Registrant" in Part I of this
Annual Report on Form 10-K, which information is incorporated
herein by reference.


ITEM 11.    Executive Compensation.
            ----------------------

    Reference is made to the information set forth under the
heading "Executive Compensation" in the Company's Proxy Statement
to be filed pursuant to Regulation 14A under the Securities Act
of 1934 within 120 days after December 31, 1995, which
information is incorporated herein by reference.


ITEM 12.    Security Ownership of Certain Beneficial Owners and
            Management.
            ---------------------------------------------------

    Reference is made to the information set forth under the
heading "Security Ownership of Certain Beneficial Owners" in the
Company's Proxy Statement to be filed pursuant to Regulation 14A
under the Securities Act of 1934 within 120 days after December
31, 1995, which information is incorporated herein by reference.


ITEM 13.    Certain Relationships and Related Transactions.
            ----------------------------------------------

    Reference is made to the information set forth under the
heading "Certain Transactions" in the Company's Proxy Statement
to be filed pursuant to Regulation 14A under the Securities Act
of 1934 within 120 days after December 31, 1995, which
information is incorporated herein by reference.

<PAGE>

                                  PART IV

ITEM 14.    Exhibits, Financial Statement Schedules, and Reports  
            on Form 8-K.
            ----------------------------------------------------

    (a)     Documents Filed as Part of this Report.
            --------------------------------------
    (1)     Financial Statements.  
            --------------------
    The following Consolidated Financial Statements of the
Company and its subsidiaries are included in this Report:

       Report of Independent Auditors 

       Consolidated Balance Sheet at December 31, 1995 and 1994

       Consolidated Statement of Operations for the Years Ended
       December 31, 1995, 1994 and 1993

       Consolidated Statement of Stockholders' Equity for the     
       Years Ended December 31, 1995, 1994 and 1993 

       Consolidated Statement of Cash Flows for the Years Ended
       December 31, 1995, 1994 and 1993

       Notes to Consolidated Financial Statements 

    (2)     Financial Statement Schedules.
            -----------------------------
    The following schedules to the Consolidated Financial
Statements of the Company and its subsidiaries are included in
this Report:

    Schedules
    ---------
    II -    Valuation and Qualifying Accounts

All other schedules for which provision is made in the applicable 
accounting regulation of the Securities and Exchange Commission
are not required or are inapplicable, and therefore have been
omitted.

<PAGE>
    (3)     Exhibits.
            --------
    3.1 -  Certificate of Incorporation of the Company
           (incorporated herein by reference to Exhibit 3.1
           to the Company's Annual Report on Form 10-K for
           the fiscal year ended December 31, 1989 (File
           No. 1-1363)).

    3.2 -  Certificate of Amendment to the Certificate of
           Incorporation of the Company, dated February 26,
           1992 (incorporated herein by reference to
           Exhibit 3.2 to the Company's Annual Report on
           Form 10-K for the fiscal year ended December 31,
           1991 (File No. 1-1363)).

    3.3 -  Certificate of Amendment to the Certificate of
           Incorporation of the Company, dated August 5,
           1993 (incorporated herein by reference to
           Exhibit 4.9 to the Company's Quarterly Report on
           Form 10-Q for the fiscal quarter ended June 30,
           1993 (File No. 1-1363)).

    3.4  - Certificate of Designation of Shares of Class H
           Cumulative Preferred Stock of the Company
           (incorporated herein by reference to Exhibit 3.2
           to the Company's Quarterly Report on Form 10-Q
           for the fiscal quarter ended June 30, 1987 (File
           No. 1-1363)).

    3.5  - Certificate of Designation of Shares of Class I
           Cumulative Redeemable Preferred Stock, Series A,
           Increasing Rate of the Company (incorporated
           herein by reference to Exhibit 3.5 to the
           Company's Annual Report on Form 10-K for the
           fiscal year ended December 31, 1987 (File No. 1-
           1363)).

    3.6  - Certificate of Designation of Shares of Class I
           Cumulative Redeemable Preferred Stock, Series B,
           Exchangeable of the Company (incorporated herein
           by reference to Exhibit 3.6 to the Company's
           Annual Report on Form 10-K for the fiscal year
           ended December 31, 1987 (File No. 1-1363)).

    3.7  - Certificate of Designation of Shares of Class I
           Preferred Stock, Series C of the Company
           (incorporated herein by reference to Exhibit 3.5
           to the Company's Annual Report on Form 10-K for
           the fiscal year ended December 31, 1990 (File
           No. 1-1363)).

<PAGE>
    3.8 -  Certificate of Designation of the Preferences of
           Class J Convertible Preferred Stock of the
           Company (incorporated herein by reference to
           Exhibit 3.7 to Amendment No. 1 to the Company's
           Registration Statement on Form S-1, filed June
           14, 1993 (File No. 33-62050)).

    3.9 -  Certificate of Correction to the Certificate of
           Designation of the Preferences of Class J
           Convertible Preferred Stock of the Company
           (incorporated herein by reference to Exhibit 4.8
           to the Company's Quarterly Report on Form 10-Q
           for the fiscal quarter ended June 30, 1993 (File
           No. 1-1363)).

   3.10 -  By-Laws of the Company (incorporated herein by
           reference to Exhibit C (pages C-1 to C-9) to the
           Company's Proxy Statement filed April 24, 1987,
           in respect of its 1987 Annual Meeting of
           Stockholders (File No. 1-1363)).

   3.11 -  Amendment to the By-Laws of the Company
           (incorporated herein by reference to Exhibit 3.4
           to the Company's Annual Report on Form 10-K for
           the fiscal year ended December 31, 1987 (File
           No. 1-1363)).

    4.1 -  Term Loan Agreement, dated as of December 28, 
           1990, between West One Bank, N.A., Imsamet of    
           Idaho, Inc., the Company and International Mill
           Service, Inc.  (The Company agrees to furnish a
           copy of such agreement to the Commission upon
           request.)

    4.2 -  Letter Amendment, effective January 28, 1992, to
           the Term Loan Agreement to which reference is
           made in Exhibit 4.1 to this Annual Report on
           Form 10-K.  (The Company agrees to furnish a
           copy of such amendment to the Commission upon
           request.)

    4.3 -  Loan and Security Agreement, dated as of April
           6, 1993, between IMS Funding Corporation and
           Greyhound Financial Corporation.  (The Company
           agrees to furnish a copy of such agreement to
           the Commission upon request.)

<PAGE>
    4.4 -  Agreement Amending Loan and Security Agreement and
           Corporate Guarantee Agreement, dated as of December 8,
           1995, between FINOVA Capital Corporation (formerly
           known as Greyhound Financial Corporation), IMS Funding
           Corporation, and International Mill Service, Inc. (The
           Company agrees to furnish a copy of such agreement to
           the Commission upon request.)

    4.5 -  Indenture, dated as of July 1, 1993, between the
           Company and United States Trust Company of New
           York, as Trustee, relating to the Company's 9-
           3/4% Senior Notes due 2003, including the form
           of such Notes attached as Exhibit A thereto
           (incorporated herein by reference to Exhibit
           4.10 to the Company's Quarterly Report on Form
           10-Q for the fiscal quarter ended June 30, 1993
           (File No. 1-1363)).

    4.6 -  First Supplemental Indenture, dated as of November 2,
           1995, between the Company and United States Trust
           Company of New York, as Trustee, relating to the
           Company's 9-3/4% Senior Notes due 2003 (incorporated
           herein by reference to Exhibit 4.15 to the Company's
           Quarterly Report on Form 10-Q for the fiscal quarter
           ended September 30, 1995 (File No. 1-1363)).

    4.7 -  Registration Rights Agreement, dated as of May
           13, 1993, among the Company, FS Equity Partners
           II, L.P., The IBM Retirement Plan Trust Fund and
           Enso Partners, L.P. (incorporated herein by
           reference to Exhibit 4.29 to Amendment No. 1 to
           the Company's Registration Statement on Form S-
           1, filed June 14, 1993 (File No. 33-62050)).

    4.8 -  Warrant to purchase shares of Common Stock of
           the Company issued to FS Equity Partners II,
           L.P., dated as of May 13, 1993 (incorporated herein by
           reference to Exhibit 4.30 to Amendment No. 1 to
           the Company's Registration Statement on Form S-
           1, filed June 14, 1993 (File No. 33-62050)).

    4.9 -  Warrant to purchase shares of Common Stock of
           the Company issued to The IBM Retirement Plan
           Trust Fund, dated as of May 13, 1993 (incorporated
           herein by reference to Exhibit 4.31 to Amendment No. 1
           to the Company's Registration Statement on Form S-1,
           filed June 14, 1993 (File No. 33-62050)).

<PAGE>
   4.10 -  Warrant to purchase shares of Common Stock of
           the Company issued to Enso Partners, L.P.,
           dated as of May 13, 1993 (incorporated herein by
           reference to Exhibit 4.32 to Amendment No. 1 to the
           Company's Registration Statement on Form S-1, filed
           June 14, 1993 (File No. 33-62050)).

   4.11 -  Warrants to purchase 244,445 shares of Common
           Stock issued to Chemical Bank, NCNB Texas
           National Bank, Banque Paribas and National Bank of
           Canada (incorporated herein by reference to Exhibit
           10.24 to Amendment No. 2 to the Company's Registration
           Statement on Form S-1, filed October 31, 1991
           (File No. 33-42381)).

   4.12 -  Amendment, dated as of September 29, 1995, to Warrant
           No. 2-1991 to purchase 53,640 shares of Common Stock
           issued to NationsBank of Texas, N.A., formerly NCNB
           Texas National Bank (incorporated herein by reference
           to Exhibit 4.16 to the Company's Quarterly Report on
           Form 10-Q for the fiscal quarter ended September 30,
           1995 (File No. 1-1363)).

   4.13 -  Loan Agreement between the Industrial
           Development Corporation of Owyhee County, Idaho
           and Envirosafe Services of Idaho, Inc. relating
           to $8,500,000 Industrial Revenue Bonds, Series
           1994. (The Company agrees to furnish a copy of
           such agreement to the Commission upon request.) 

  4.14* -  Credit Agreement, dated as of December 19, 1995, among
           the Company, International Mill Service, Inc., the
           lenders parties thereto, NationsBank, N.A., as
           Administrative Agent, and Credit Lyonnais as
           Syndication Agent.

   10.1 -  Restated Incentive Stock Option Plan of the
           Company, as amended (incorporated herein by
           reference to Exhibit A to the Company's
           Registration Statement on Form S-8, filed
           January 17, 1989 (File No. 33-26633)).

<PAGE>
   10.2 -  Promissory Note of Louis A. Guzzetti, Jr., dated
           March 31, 1993, amending and replacing the
           Promissory Notes dated October 15, 1987, March
           31, 1991 and March 31, 1992 and the Letter
           Amendments dated April 13, 1991 and May 12,
           1992, payable to the Company in the principal
           amount of $459,039.00 (incorporated herein by
           reference to Exhibit 10.13 to Post-Effective
           Amendment No. 1 to the Company's Registration
           Statement on Form S-1, filed September 16, 1993
           (File No. 33-46930)).

   10.3 -  Promissory Notes of Aarne Anderson, Jerrold I.
           Dolinger, George E. Fuehrer, George T. Milano
           and Mr. Guzzetti, dated as of April 1, 1993,
           amending and replacing the Promissory Notes
           dated January 13, 1989, April 1, 1991 and April
           1, 1992, payable to the Company in the aggregate
           principal amount of $1,122,601 (incorporated
           herein by reference to Exhibit 10.17 to Post-
           Effective Amendment No. 1 to the Company's
           Registration Statement on Form S-1, filed
           September 16, 1993 (File No. 33-46930)).

   10.4 -  Stock Option Agreement, dated March 18, 1992,
           between the Company and Raymond P. Caldiero
           (incorporated herein by reference to Exhibit
           10.20 to the Company's Annual Report on Form 10-
           K for the fiscal year ended December 31, 1992
           (File No. 1-1363)).

   10.5 -  Stock Option Agreement, dated March 18, 1992,
           between the Company and Jeffrey G. Miller
           (incorporated herein by reference to Exhibit
           10.21 to the Company's Annual Report on Form 10-
           K for the fiscal year ended December 31, 1992
           (File No. 1-1363)).

   10.6 -  Amendment, dated August 5, 1993, to the Stock
           Option Agreement, dated March 18, 1992, between
           the Company and Jeffrey G. Miller, to which
           reference is made in Exhibit 10.9 to this Annual
           Report on Form 10-K (incorporated herein by
           reference to Exhibit 10.22 to Post-Effective
           Amendment No. 1 to the Company's Registration
           Statement on Form S-1, filed September 16, 1993
           (File No. 33-46930)).

<PAGE>
   10.7 -  Stock Option Agreement, dated August 5, 1993,
           between the Company and Wallace B. Askins
           (incorporated herein by reference to Exhibit
           10.23 to Post-Effective Amendment No. 1 to the
           Company's Registration Statement on Form S-1,
           filed September 16, 1993 (File No. 33-46930)).

   10.8 -  Stock Option Agreement, dated November 1, 1993,
           between the Company and Arthur R. Seder, Jr.
           (incorporated herein by reference to Exhibit
           10.12 to the Company's Quarterly Report on Form
           10-Q for the fiscal quarter ended September 30,
           1994 (File No. 1-1363)).

   10.9 -  1993 Stock Option Plan of the Company
           (incorporated herein by reference to Exhibit
           10.21 to Amendment No. 1 to the Company's
           Registration Statement on Form S-1, filed June
           14, 1993 (File No. 33-62050)).

  10.10  - EnviroSource, Inc. Stock Option Plan for Non-
           Affiliated Directors, dated as of January 1,
           1995 (incorporated herein by reference to Exhibit
           10.14 to the Company's Annual Report on Form 10-K for
           the fiscal year ended December 31, 1994 (File No. 1-
           1363)).

  10.11 -  Stock Option Agreements, dated January 1, 1995,
           between the Company and Arthur R. Seder, Jr., Wallace
           B. Askins, Raymond P. Caldiero and Jeffrey G. Miller
           (incorporated herein by reference to Exhibits 10.15
           through and including 10.18 to the Company's Annual
           Report on Form 10-K for the fiscal year ended December
           31, 1994 (File No. 1-1363)).

  10.12 -  Supplemental Executive Retirement Plan of the
           Company, effective January 1, 1995 (incorporated
           herein by reference to Exhibit 10.19 to the Company's
           Annual Report on Form 10-K for the fiscal year ended
           December 31, 1994 (File No. 1-1363))

<PAGE>
 10.13* -  Stock Option Agreements, dated July 1, 1995, between
           the Company and Wallace B. Askins and Arthur R. Seder.

 10.14* -  Stock Option Agreements, dated January 1, 1996,
           between the Company and Arthur R. Seder, Jr., Wallace
           B. Askins, Raymond P. Caldiero and Jeffrey G. Miller.

  21.1* -  Subsidiaries of the Company.

  23.1* -  Consent of Ernst & Young.



(b)     Reports on Form 8-K.

       During the last quarter of the fiscal year ended December
31, 1995, the Company filed no Current Reports on Form 8-K.

*  Filed herewith.    
<PAGE>
                         SIGNATURES


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

Dated:  March 15, 1996
                                ENVIROSOURCE, INC.


                               By: /s/ LOUIS A. GUZZETTI, JR.
                                    
                                    Louis A. Guzzetti, Jr.
                                    President and Chief
                                    Executive Officer



    Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the Company and in the capacities indicated
on March 15, 1996.

Signature                           Title

/s/ LOUIS A. GUZZETTI, JR.          President and Chief Executive
Louis A. Guzzetti, Jr.               Officer (Principal Executive 
                                     Officer) and Director 


/s/ JAMES C. HULL                   Vice President and Chief
James C. Hull                        Financial Officer (Principal 
                                     Financial and Accounting     
                                     Officer)


/s/ RONALD P. SPOGLI                Chairman of the Board of
Ronald P. Spogli                     Directors


/s/ WALLACE B. ASKINS               Director
Wallace B. Askins

<PAGE>
/s/ RAYMOND P. CALDIERO             Director
Raymond P. Caldiero


/s/ MARK J. DORAN                   Director
Mark J. Doran


/s/ JEFFREY G. MILLER               Director
Jeffrey G. Miller


/s/ JON D. RALPH                    Director
Jon D. Ralph


/s/ JOHN M. ROTH                    Director
John M. Roth


/s/ CHARLES P. RULLMAN, JR.         Director
Charles P. Rullman, Jr.


/s/ ARTHUR R. SEDER, JR.            Director
Arthur R. Seder, Jr.


/s/ J. FREDERICK SIMMONS            Director
J. Frederick Simmons

<PAGE>
 
REPORT OF INDEPENDENT AUDITORS 
 
Stockholders and Board of Directors 
EnviroSource, Inc. 
 
We have audited the accompanying consolidated balance sheet of 
EnviroSource, Inc. as of December 31, 1995 and 1994, and the 
related consolidated statements of operations, stockholders' 
equity, and cash flows for each of the three years in the period 
ended December 31, 1995.  Our audits also included the financial 
statement schedule listed in the Index at Item 14(a).  These 
financial statements and schedule are the responsibility of the 
Company's management.  Our responsibility is to express an 
opinion on these financial statements and schedule based on our 
audits. 
 
We conducted our audits in accordance with generally accepted 
auditing standards.  Those standards require that we plan and 
perform the audit to obtain reasonable assurance about whether 
the financial statements are free of material misstatement.  An 
audit includes examining, on a test basis, evidence supporting 
the amounts and disclosures in the financial statements.  An 
audit also includes assessing the accounting principles used and 
significant estimates made by management, as well as evaluating 
the overall financial statement presentation.  We believe that 
our audits provide a reasonable basis for our opinion.   
 
In our opinion, the consolidated financial statements referred to 
above present fairly, in all material respects, the consolidated 
financial position of EnviroSource, Inc. at December 31, 1995 and 
1994, and the consolidated results of its operations and its cash 
flows for each of the three years in the period ended December 
31, 1995, in conformity with generally accepted accounting 
principles.  Also, in our opinion, the related financial 
statement schedule, when considered in relation to the basic 
financial statements taken as a whole, present fairly in all 
material respects the information set forth therein. 
 
As discussed in Note K to the financial statements, in 1993 the 
Company changed its method of accounting for income taxes. 
 
 
 
                                  /s/ ERNST & YOUNG LLP 
 
Stamford, Connecticut 
February 19, 1996

                               S-1                                

<PAGE>

<TABLE>
<CAPTION>
                            EnviroSource, Inc.
                        CONSOLIDATED BALANCE SHEET
                          (Dollars in thousands)

                                                December 31,                          
                                              -----------------
                                              1995        1994     
                                              ----        ----
<S>                                      <C>         <C>
ASSETS

Current assets:
  Cash and cash equivalents               $   8,367   $   8,389 
  Accounts receivable, less allowance
    for doubtful accounts of $729
    and $616                                 37,208      45,865 
  Other current assets                        8,252       7,635 
                                            -------     ------- 
    Total current assets                     53,827      61,889 

Property, plant and equipment:
  Land and improvements                       1,319       1,807 
  Landfill development                       29,577      47,219 
  Buildings and improvements                 34,769      30,755 
  Machinery and equipment                   221,533     202,813 
                                            -------     ------- 
                                            287,198     282,594 
  Less allowance for depreciation           124,636     127,124 
                                            -------     ------- 
                                            162,562     155,470 

Goodwill, less amortization                 155,255     165,458 

Landfill permits, less amortization          22,549      22,739 

Closure trust funds and deferred 
  charges, less amortization                 33,867      25,573 

Debt issuance costs, less amortization        9,625       8,679 

Other assets                                 11,997      10,370 
                                            -------     ------- 

                                         $  449,682  $  450,178 
                                            =======     ======= 


</TABLE>



See Notes to Consolidated Financial Statements.
                               S-2

<PAGE>
<TABLE>
<CAPTION>

                            EnviroSource, Inc.
                  CONSOLIDATED BALANCE SHEET -- Continued
                          (Dollars in thousands)

                                               December 31,                          
                                             -----------------
                                              1995       1994     
                                              ----       ----
<S>                                     <C>           <C>
LIABILITIES AND STOCKHOLDERS' EQUITY 

Current liabilities:
  Trade payables                          $  13,125   $  15,713 
  Salaries, wages and related benefits       10,161      12,268 
  Insurance obligations                       6,257       8,113 
  Estimated restructuring costs               1,779       6,337 
  Other current liabilities                  14,115      18,689 
  Current portion of debt                     9,397       9,044 
  Class G redeemable preferred stock
    due July 15, 1996                        33,092             
                                            -------     ------- 
      Total current liabilities              87,926      70,164 

Long-term debt                              275,158     260,423 

Other liabilities                            53,994      63,674 

Class G redeemable preferred stock                       31,396 

Commitments and contingencies (Note O)                          

Stockholders' equity:
  Common stock, par value $.05 per
    share, 60,000,000 shares author-
    ized, 40,194,244 shares issued 
    and outstanding in 1995 
    and 40,093,759 in 1994                    2,010       2,005 
  Capital in excess of par value            162,580     162,573 
  Accumulated deficit                      (130,189)   (138,148)
  Stock purchase loans receivable from 
    officers                                   (840)       (840)
  Canadian translation adjustment              (957)     (1,069)
                                            -------     ------- 
      Total stockholders' equity             32,604      24,521 
                                            -------     ------- 

                                        $   449,682 $   450,178 
                                            =======     ======= 

See Notes to Consolidated Financial Statements.

                               S-3

<PAGE>

</TABLE>
<TABLE>
<CAPTION>

                              EnviroSource, Inc.
                     CONSOLIDATED STATEMENT OF OPERATIONS
             (Dollars in thousands, except for per share amounts)

                                     Years Ended December 31,    
                                   -----------------------------
                                   1995        1994        1993   
                                   ----        ----        ----
<S>                       <C>              <C>          <C>
Revenues                       $ 264,684    $ 259,515   $ 271,026 

Cost of revenues                 196,383      188,583     208,511 
Selling, general and 
  administrative expenses         28,392       31,213      35,362 
Unusual items, net (Note B)       (2,457)                  18,500 
                                 -------      -------     ------- 
Operating income                  42,366       39,719       8,653 

Interest income                    1,146          992       1,185 
Interest expense                 (27,400)     (25,372)    (28,863)
                                 -------      -------     ------- 
                                  16,112       15,339     (19,025)

Income tax expense:
  Taxes payable                    1,262        2,576       2,549 
  Federal taxes not 
    payable in cash                4,346        1,704             
                                 -------      -------     ------- 

Income (loss) before extraordi-
  nary loss and cumulative 
  effect of accounting change     10,504       11,059     (21,574)

Extraordinary debt 
  extinguishment loss               (806)                 (21,930)

Cumulative effect of income 
  tax accounting change                                    (2,302)
                                  -------     -------     ------- 

Net income (loss)                  9,698       11,059     (45,806)

Preferred stock dividend 
  requirements, reduced by
  retirement gains of $1,685 
  in 1994                         (1,739)        (602)     (3,182)
                                 -------      -------     ------- 

Income (loss) applicable to 
  common shares and equivalents $  7,959   $   10,457   $ (48,988)
                                 =======      =======     ======= 

Income (loss) per share:
  Before extraordinary loss 
    and cumulative effect of
    accounting change          $     .22    $     .26   $    (.73)
  Extraordinary loss                (.02)                    (.64)
  Cumulative effect of income
    tax accounting change                                    (.07)
                                  -------      -------     ------- 
  Net income (loss)            $     .20    $     .26   $   (1.44)
                                 =======       =======     ======= 

</TABLE>
See Notes to Consolidated Financial Statements.

                                     S-4

<PAGE>
<TABLE>
<CAPTION>

                                             EnviroSource, Inc.
                              CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY 
                                           (Dollars in thousands)
                                                                                       Common        
                                                                                      Stock in  
                                                                                      Treasury  
                                       Capital in                Stock    Canadian   and Class H
                                Common Excess of   Accumulated  Purchase  Translation Preferred
                                Stock  Par Value    Deficit       Loans   Adjustment  Stock      Total 
                               -------  -------     -------      -------   ---------  -------  -------
<S>                          <C>      <C>        <C>         <C>       <C>        <C>        <C>
Balance January 1, 1993      $ 1,250  $ 129,394  $(100,209)  $  (990)  $       -  $  (8,896) $  20,549 

Common stock issued
  (16,460,555 shares)            753     33,067                                       8,896     42,716 
Net loss                                           (45,806)                                    (45,806)
Preferred stock dividends
  and accretion                                     (2,590)                                     (2,590)
Loan repayment                                                   150                               150 
Translation adjustment                                                      (802)                 (802)
                             -------    -------    -------   -------     -------    -------    ------- 

Balance December 31, 1993      2,003    162,461   (148,605)     (840)       (802)         -     14,217 
Common stock issued
  (41,500 shares)                  2        112                                                    114 
Net income                                          11,059                                      11,059 
Preferred stock dividends
  and accretion                                     (2,287)                                     (2,287)
Preferred stock retirement gains                     1,685                                       1,685 
Translation adjustment                                                      (267)                 (267)
                             -------    -------    -------   -------     -------               ------- 

Balance December 31, 1994      2,005    162,573   (138,148)     (840)     (1,069)               24,521 

Common stock issued 
  (100,485 shares)                 5          7                                                     12 
Net income                                           9,698                                       9,698 
Preferred stock dividends
  and accretion                                     (1,739)                                     (1,739)
Translation adjustment                                                       112                   112 
                             -------    -------    -------   -------     -------               ------- 

Balance December 31, 1995    $ 2,010  $ 162,580  $(130,189)  $  (840)  $    (957)            $  32,604 
                             =======    =======    =======   =======     =======               ======= 

</TABLE>
See Notes to Consolidated Financial Statements.

<PAGE>
<TABLE>
<CAPTION>
                                EnviroSource, Inc.
                       CONSOLIDATED STATEMENT OF CASH FLOWS
                              (Dollars in thousands)


                                              Years Ended December 31, 
                                            ---------------------------
                                             1995       1994      1993   
                                             ----       ----      ----
<S>                                        <C>        <C>        <C>
OPERATING ACTIVITIES
Income (loss) before extraordinary 
  loss and cumulative effect of 
  accounting change                        $  10,504  $ 11,059   $(21,574)
Adjustments to reconcile income (loss) 
  to cash provided by operations:
  Income tax expense not payable in cash       4,346     1,704 
  Unusual items, net of payments              (6,816)   (5,686)    18,500 
  Depreciation                                24,545    24,352     27,241 
  Amortization                                 9,071    10,656     12,790 
  Changes in working capital                     368    (4,079)    (1,505)
  Other                                         (113)    4,010        270 
                                             -------   -------    ------- 
Cash provided by operating activities         41,905    42,016     35,722 
                                             -------   -------    ------- 

INVESTING ACTIVITIES
Property, plant and equipment:
  Additions                                  (32,560)  (39,261)   (32,768)
  Proceeds from dispositions                     383       594        128 
Purchase of intangibles                                 (3,417)
Landfill permit additions and
  closure expenditures                        (1,125)   (1,199)      (965)
Closure trust fund payments                   (9,087)  (12,866)    (5,174)
Ongoing net cash flows related to
  IU International acquisition                (9,600)   (2,471)    (4,816)
Other                                         (2,299)   (2,203)       131 
                                              -------  -------    ------- 
Cash used by investing activities            (54,288)  (60,823)   (43,464)
                                             -------   -------    ------- 

FINANCING ACTIVITIES
Sale of common stock                              12       114     42,716 
Issuance of debt                              75,188    41,500    238,500 
Debt issuance costs                           (2,624)     (643)    (9,687)
Debt repayment                               (60,173)  (13,035)  (247,404)
Retirement of preferred stock                    (42)  (11,322)    (5,148)
Cash portion of extraordinary loss                                (11,348)
                                             -------   -------    ------- 
Cash provided by financing activities         12,361    16,614      7,629 
                                             -------   -------    ------- 

CASH AND CASH EQUIVALENTS
  Increase (decrease) during the year            (22)   (2,193)      (113)
  Beginning of year                            8,389    10,582     10,695 
                                             -------   -------    ------- 
  End of year                              $   8,367  $  8,389   $ 10,582 
                                             =======   =======    ======= 

</TABLE>

See Notes to Consolidated Financial Statements.
                                  S-6


<PAGE>

                                EnviroSource, Inc.
                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE A -- ACCOUNTING POLICIES
-----------------------------

PRINCIPLES OF CONSOLIDATION:  The consolidated financial statements include
the accounts of the Company and its subsidiaries.  Intercompany accounts and
transactions have been eliminated.  

USE OF ESTIMATES:  Preparing financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the
disclosures of contingent assets and liabilities at the dates of the financial
statements and the reported amounts of revenues and expenses during the
reporting periods.  Actual results could differ from those estimates.

CASH EQUIVALENTS:  Cash equivalents are highly liquid investments with
maturities of three months or less when acquired.

PROPERTY, PLANT AND EQUIPMENT:  Property, plant and equipment is stated at
cost.  For financial reporting purposes, depreciation is computed by the
straight-line method based on the following lives:  buildings -- 10 to 30
years and machinery and equipment -- 3 to 25 years.  Landfill development
costs are depreciated based on the ratio of cubic yards of disposal capacity
utilized to total cubic yards of disposal capacity.  

LANDFILL PERMITS:  Costs to acquire and maintain landfill permits are deferred
and amortized based on the ratio of cubic yards of disposal capacity utilized
to total cubic yards of disposal capacity.  Accumulated amortization was $11.1
million and $9.6 million at December 31, 1995 and 1994.

CLOSURE TRUST FUNDS AND DEFERRED CHARGES:  An Idaho closure trust fund secures
Idaho landfill closure and post-closure obligations, which are being accrued
as liabilities in the balance sheet.  The trust fund is invested in U.S.
government and government agency securities, which are classified as
"available-for-sale" for accounting purposes.  The investments have maturities
of six months to three years and are carried at cost, which approximates
market value.  Unrealized gains were not material.  Interest income and
realized gains and losses are recognized in earnings.  Excess funds, if any,
will revert to the Company.

Ohio landfill trust fund balances represent deferred charges that are being
amortized as part of closure costs.  These trusts (also invested in U.S.
government and government agency securities) will fund the latter stages of
closure activity and all post-closure activity in perpetuity.  Excess funds,
if any, will revert to the State of Ohio; accordingly, no interest income is
recognized.  Accumulated amortization was $8.4 million and $7.3 million at
December 31, 1995 and 1994.

<PAGE>
CLOSURE COSTS:  The estimated costs of the future closure and post-closure
monitoring and maintenance of landfills are amortized or accrued based on the
ratio of cubic yards of disposal capacity utilized to total cubic yards of
disposal capacity.  Closure costs are similar to landfill development costs,
but are generally incurred for aboveground construction.  Closure cost
accruals of $9.2 million and $9.6 million are included in other long-term
liabilities at December 31, 1995 and 1994.

GOODWILL:  The excess of purchase price over fair value of identified net
assets of acquired businesses is recorded as an asset and amortized using the
straight-line method over 40 years.  Accumulated amortization was $42.4
million and $37.5 million at December 31, 1995 and 1994.  Most of the goodwill
is identified with the Company's excellent reputation and long-term
relationships within the steel industry.  The carrying value of goodwill will
be reviewed if facts and circumstances suggest that it may be impaired.  If
this review indicates that the goodwill will not be recoverable, as determined
based on anticipated cash flows over the remaining amortization period, the
carrying value of the goodwill will be reduced based on the discounted present
value of the anticipated cash flows.  As income tax benefits attributable to
acquisitions of businesses are recognized, they are credited to reduce
goodwill.

REVENUES: Most of the Company's revenues are recognized as services are
provided to customers.  Revenues of $8 million in 1995, $6.9 million in 1994
and $27.2 million in 1993 are from long-term contracts to design, supply and
construct "wet scrubber sludge" stabilization systems for electric utilities. 
Revenues from these contracts are recognized using the percentage-of-
completion method, with progress toward completion measured in labor hours. 
Such contracts are segmented between "design and supply" and "construction",
and a separate profit margin is recognized for each segment.  

IMPAIRMENT OF LONG-LIVED ASSETS:  Statement of Financial Accounting Standards
No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of, is effective in 1996.  Based on current
expectations, the Company does not anticipate adoption of this statement will
have a material effect on its consolidated financial statements.  One
consideration in making this determination is the Treatment & Disposal
Services business segment's marketing efforts to increase landfill volume by
treating steel mill electric arc furnace dust with its proprietary Super Detox
technology.  Treatment & Disposal Services began processing this waste stream
at its landfills in 1995 and it expects to handle increasing volumes in 1996
and subsequent years.                             

STOCK-BASED COMPENSATION PLANS:  The Company accounts for stock-based
compensation plans in accordance with APB Opinion No. 25, Accounting for Stock
Issued to Employees, and will continue to do so.

<PAGE>
PER SHARE CALCULATIONS:   Per share amounts are based on the weighted average
number of common shares outstanding, and in 1995 and 1994 the dilutive effect
of stock options and warrants:  40,527,000 in 1995, 40,292,000 in 1994 and
34,009,000 in 1993.  The Class G preferred stock was not dilutive.  

On May 13, 1993 the Company issued the equivalent of 13,333,333 shares of
common stock and all the outstanding Class H preferred stock was exchanged
into 3,066,667 common shares (Note D).  Had such transactions taken place at
the beginning of 1993, the per share loss before the extraordinary loss and
the cumulative effect of an accounting change would have been $.58.


NOTE B -- UNUSUAL ITEMS, NET
----------------------------

1995 -- The Company purchased IU International Corporation ("IU
International") in 1988.  During 1995 the Company resolved favorably a number
of liabilities resulting from the IU International acquisition, primarily
liabilities for insurance matters (Note I).  The benefit of these favorable
developments was partially offset by additional charges for other matters
arising from the IU International acquisition.  The net credit to income in
1995 amounted to $3.6 million, before taxes.  The Company also increased its
estimate of costs to complete the final steps of its 1993 restructuring by $.2
million (Note C) and incurred $1 million of termination costs for additional
headcount reductions during 1995.  After related income tax expense of $3.5
million, these items reduced net income by approximately $1 million or $.02
per share.

1993 -- In addition to the 1993 restructuring charge (Note C), in 1993 the
Company also concluded that it would settle certain of the IU International
acquisition liabilities recorded for insurance and other matters for less than
originally anticipated.  Accordingly, the Company reduced such liabilities by
$3.5 million.  The resulting credit to income together with the $22 million
restructuring charge amounted to a net charge of $17.6 million or $.52 per
share, after taxes.


NOTE C -- 1993 RESTRUCTURING CHARGE

1993 -- In the fourth quarter of 1993, the Company recorded a $22 million
restructuring charge, primarily to (i) terminate recycling initiatives that
had not achieved profitability, (ii) discontinue efforts to obtain a hazardous
waste landfill permit in Pennsylvania, and (iii) reorganize its Envirosafe and
Conversion Systems units into the Treatment & Disposal Services business
segment.  The terminated recycling units (for the thermal treatment of
electric arc steel furnace flue dust to recover zinc and for the sale of
stabilized electric utility scrubber sludge for use in manufacturing concrete
masonry blocks), together with Pennsylvania permitting efforts and other
terminated activities, incurred 1993 operating losses and costs that reduced
operating income by $3.3 million.  Approximately $10 million of the total

<PAGE>
restructuring charge represented noncash losses resulting primarily from the
write-off of property, plant and equipment.  The charge also included $1
million for estimated operating losses to be incurred before the discontinued
activities could be terminated, and the remainder represented estimated cash
costs to close down the operating sites.

1994 -- As they were being terminated in the first quarter of 1994, the
discontinued activities incurred operating losses of $.5 million, which were
charged to the restructuring accrual.  During 1994 the Company had more
headcount reductions, at higher salary levels, than originally anticipated. 
Consequently, severance costs were higher than anticipated (and the ongoing
cost savings greater than originally anticipated), and costs to discontinue
efforts to obtain a hazardous waste landfill permit and for the expected sale
of the Pennsylvania landfill site were less than anticipated, by approximately
the same amounts.  

1995 -- In 1995, the Company increased its estimate of costs to complete the
final steps of the restructuring, primarily costs related to shut-downs of
recycling units, by $.2 million.


NOTE D -- 1993 RECAPITALIZATION
-------------------------------

On May 13, 1993:

-  The Company sold the equivalent of 13,333,333 shares of the Company's  
   common  stock to an affiliate of Freeman Spogli & Co. ("Freeman Spogli") and
   another investor for $50 million in cash ($42.7 million after fees and
   expenses).  The securities sold were 6,433,333 shares of common stock and
   shares of a new class of preferred stock which was automatically converted
   into 6,900,000 shares of common stock on August 5, 1993.

-  Freeman Spogli and the other investor purchased from The Dyson-Kissner-
   Moran Corporation and WM Financial Corporation (together "DKM"), for an
   aggregate purchase price of $32.6 million, the following:  (i) 5,636,568
   shares of the Company's common stock, (ii) all 107,000 outstanding shares of 
   the Company's Class H preferred stock, (iii) warrants to purchase 1,695,652
   shares of the Company's common stock at exercise  prices of $3.50 and $4.00
   per share, and (iv) an option (subsequently exercised) to purchase 1,000
   shares of the Company's common stock from DKM for $3.75 per share.
   Simultaneous with their purchase, all of the outstanding shares of Class H
   preferred stock were exchanged for 3,066,667 newly issued shares of the
   Company's common stock and the warrants were amended to provide for their
   exercise using a cashless exercise feature. 

-  Freeman Spogli sold a portion of the aforementioned securities to The IBM
   Retirement Plan Trust Fund (the "IBM Trust").  As a result of these
   transactions, Freeman Spogli owned 47.3% and the IBM Trust owned 6.6% of the
   total outstanding voting power of the Company, and DKM no longer owned any
   interest in the Company.  Six of the 11 members of the Board of Directors are
   partners or employees of Freeman Spogli.  

<PAGE>
-  The net proceeds from the equity sale were applied to (i) redeem for $4.3
   million the Class B, D and E preferred stock held by DKM, (ii) repay $10
   million of notes due June 30, 1994, and (iii) reduce bank credit agreement
   borrowings.

In addition, on July 1, 1993:

-  The Company sold $220 million principal amount of 9-3/4% Senior Notes for
   $212.4 million of net proceeds, after expenses and underwriting discounts and
   commissions.  Most of the proceeds were used to retire the Company's 14%
   Subordinated Notes and reduce bank credit agreement borrowings to zero.  

-  The Company entered into a $60 million bank credit facility to replace its
   then existing bank credit agreement.  

-  The Company called all of its outstanding 14% Subordinated Notes for
   redemption, at a price of 106.2% of principal amount plus interest through
   the redemption date.  The redemption was completed on August 2, 1993.

Extraordinary Loss

-  The above transactions resulted in an extraordinary debt extinguishment
   loss of $21.9 million, consisting of the unamortized debt discount and
   issuance costs of the retired debt and terminated bank credit agreement
   together with the redemption premium and other related costs for the 14%
   Subordinated Notes.

<TABLE>
<CAPTION>

NOTE E -- DEBT
--------------

Debt is summarized as follows (in thousands):

                                                     December 31,     
                                                 ---------------------
                                                   1995        1994   
                                                   ----        ----
<S>                                             <C>         <C>
9-3/4% Senior Notes                             $ 220,000   $ 220,000 
Bank Credit Facility                               44,000      25,000 
Industrial revenue bond financings,
  equipment loans and other                        20,555      24,467 
                                                  -------     ------- 
                                                  284,555     269,467 
Less current maturities                             9,397       9,044 
                                                  -------     ------- 
Long-term debt                                  $ 275,158   $ 260,423 
                                                  =======     ======= 

</TABLE>
<PAGE>
At December 31, 1995, required principal payments for each of the succeeding
five years are:  $9.4 million in 1996 (including $5 million voluntarily repaid
in January), $2.7 million in 1997, $3.9 million in 1998, $1.0 million in 1999
and $.1 million in 2000.

The 9-3/4% Senior Notes (10.3% effective rate including amortization of
issuance costs) are due in 2003 and are redeemable, in whole or in part, at
the Company's option after June 15, 1998 at 104.9% of principal amount,
declining to 100% by June 15, 2001.  Upon a change in control (as defined),
the Company must offer to purchase the Senior Notes at 101% of principal
amount.  

In December 1995, the Company entered into a new five-year bank credit
facility.  This resulted in an extraordinary debt extinguishment loss of $.8
million, consisting of the unamortized issuance costs of the previous bank
credit agreement.

The new bank credit facility provides $100 million of revolving credit
borrowing and letter of credit capacity, declining by $12.5 million on each of
January 4, 1999 and January 3, 2000 and terminating on January 2, 2001. 
Interest on borrowings is at a bank's prime rate (8.5% at December 31, 1995)
plus .50% or at Eurodollar rates (approximately 5.7% at December 31, 1995)
plus 1.75%.  Outstanding letter of credit fees are at the rate of 2% per
annum, and there is a .375% per annum commitment fee on the unutilized portion
of the total amount.  The facility is secured by accounts receivable and the
Company's investments in stock and intercompany notes of its subsidiaries.  At
December 31, 1995, $44 million of revolving credit borrowings and $43.4
million of standby letters of credit were outstanding under this facility,
including a $34.1 million letter of credit that guarantees payment for the
redemption or retirement of the Class G preferred stock by July 15, 1996 (Note
F).

The bank facility prohibits cash dividends and contains financial covenants
that require the Company to meet certain financial ratios and tests.  Both the
Senior Notes indenture and the bank facility contain additional restrictions
customarily found in such agreements, such as limits on indebtedness and
payments with respect to capital stock.  

Industrial revenue bond financings of $9.1 million carry a weighted average
effective interest rate of 9.3%.  Equipment loans and other debt carry a
weighted average effective interest rate of 11.7% and are secured with
equipment.


NOTE F -- CLASS G REDEEMABLE PREFERRED STOCK
--------------------------------------------

At December 31, 1995, 237,420 shares of Class G preferred stock were
outstanding.  The Company is required to redeem such shares on July 15, 1996
at $100 per share plus accrued dividends.  Such redemption will require $34.1
million, which will be financed with borrowings under the Company's bank
credit agreement.  In 1994, the Company repurchased and retired 100,800 shares
of Class G preferred stock for $11.3 million.  

<PAGE>
Each share of Class G preferred stock has a $.25 par value and is convertible
into 7.7 shares of common stock.  Class G preferred stockholders are entitled
to receive cumulative quarterly dividends, when declared, at the annual rate
of $7.25 per share.  The Company has not declared quarterly dividends that
were otherwise payable beginning in October 1990.  The December 31, 1995
recorded value and redemption value of the Class G preferred stock both
include approximately $9.4 million of cumulative and undeclared dividends.  

Upon liquidation, dissolution or winding up of the Company, the holders of
Class G preferred stock are entitled to receive the redemption value of their
shares before any distribution in respect of the common stock.  Each share of
Class G preferred stock has one vote, generally voting as a single class with
the shares of common stock upon all matters presented to the stockholders.


NOTE G -- STOCKHOLDERS' EQUITY 
------------------------------

As part of the 1993 recapitalization (Note D), the Company issued the
equivalent of 13,333,333 shares of the Company's common stock, and all 107,000
outstanding shares of Class H preferred stock, aggregate par value $27,000,
were exchanged for 3,066,667 shares of common stock.

Warrants are outstanding to purchase 400,000 shares of the Company's common
stock at $3.50 per share, expiring in equal annual amounts on January 1, 1997
and 1998.  The warrants may be exercised using a cashless exercise feature (by
the surrender of shares of common stock subject to the warrants).  Freeman
Spogli holds warrants for 87% of such shares and the IBM Trust holds 12%.  In
1995 warrants to purchase 695,652 shares of the Company's common stock at $4
per share and 200,000 shares at $3.50 per share were exercised using this
cashless exercise feature, resulting in the issuance of 95,685 shares of the
Company's common stock.

In addition, warrants to purchase 242,836 shares of common stock at seven
cents per share are outstanding.  In 1993 a warrant to purchase 55,555 shares
of the Company's common stock was exercised at seven cents per share.

A total of 5,851,330 shares of the Company's common stock have been reserved
for the warrants described above, for conversion of Class G preferred stock
(Note F) and for stock options (Note H).  Under the terms of the Senior Notes
indenture and bank credit facility, the Company may not declare or pay
dividends or make cash distributions to the common stockholders.  

<PAGE>
The Company is authorized to issue 5.4 million shares of preferred stock, par
value $.25 per share, with such terms and conditions as shall be specified by
the Company's Board of Directors.  Upon redemption of Class G preferred stock,
an additional .2 million shares will be authorized for issue.


NOTE H -- STOCK OPTIONS
-----------------------

The Company maintains stock option plans that provide options to key employees
for the purchase of shares of the Company's common stock.  Incentive stock
options or non-qualified stock options are permitted.  The terms, conditions
and numbers of shares are determined by the Compensation and Stock Option
Committee of the Board of Directors.  Incentive stock options may not be
granted at option prices less than the fair market value of the stock at the
time of grant.  Non-qualified stock options may not be granted at option
prices less than 50% of the fair market value at the time of grant.  At
December 31, 1995, 1,091,150 shares were available for future grants.

In 1995 the Company adopted a stock option plan for outside directors (who are
not affiliated with Freeman Spogli).  Under the plan, on January 1 of each
year each outside director is granted options to purchase 5,000 shares of the
Company's common stock at the prior year-end market price.  The plan also
allows these directors to elect to receive below-market options in lieu of
their annual directors' fees.  In 1995 two directors elected to receive such
options.  All options granted under the plan become exercisable on the
following January 1.  At December 31, 1995, 697,568 shares were available for
future grants.

The Company previously granted the four outside directors options outside the
option plans to purchase 80,000 shares of the Company's common stock at option
prices equal to the fair market value at the time of grant. 

Option activity is summarized below:

<TABLE>
<CAPTION>
                                                    Shares  
                                      --------------------------------
                                           1995       1994       1993 
                                           ----       ----       ----
<S>                                   <C>        <C>        <C>
Shares under option at Jan. 1         1,286,885  1,656,100  1,524,100 
Options granted                         435,082     48,740    689,000 
Options exercised (at average
  exercise prices of $2.50 in 1995, 
  $2.74 in 1994 and $2.50 in 1993)       (4,800)   (41,500)    (5,000)
Options expired or cancelled           (125,525)  (376,455)  (552,000)
                                        -------    -------    ------- 
Shares under option at Dec. 31        1,591,642  1,286,885  1,656,100 
                                        =======    =======    ======= 
Options exercisable at Dec. 31          866,485    612,200    618,140 
                                        =======    =======    ======= 

</TABLE>
At December 31, 1995, option prices ranged from $2.50 to $8.38 per share, and
averaged $4.27 per share.  These options expire on various dates from January
1996 through July 2005.


<PAGE>
NOTE I - IU INTERNATIONAL ACQUISITION OBLIGATIONS
-------------------------------------------------

The Company purchased IU International Corporation ("IU International") in
1988.  The Company has certain ongoing obligations resulting from the IU
International acquisition that are unrelated to its current operations.  

Current liabilities include IU International acquisition obligations of $7.1
million at December 31, 1995 and $12 million at December 31, 1994.  These
amounts represent ongoing obligations for insurance, employee benefits and other
matters.  Although the timing of some of the payments is uncertain, payments
of at least $4 million will be required in 1996.  As in the past, such
payments will be reduced by IU International-related recoveries, if any. 
Payments on such obligations, reduced by recoveries, amounted to $9.6 million
in 1995, $2.5 million in 1994 and $4.8 million in 1993.

Non-current other liabilities includes IU International acquisition
obligations of $32.3 million at December 31, 1995 and $41.4 million at
December 31, 1994 for insurance, employee benefits, income tax matters and
other disputed matters.

In 1993 IU International liabilities related to income taxes were reduced by
$18.5 million because such liabilities were expected to be settled for less
than the amounts anticipated in the allocation of the 1988 acquisition cost. 
Accordingly, an $18.5 million reduction in goodwill was also recorded.  See
Note B for other adjustments to IU International liabilities which resulted in
net credits to income.


NOTE J -- BUSINESS SEGMENTS
---------------------------

The Company's business segments are:  Industrial Environmental Services, which
provides recycling and other specialized services for the steel and aluminum
industries, and Treatment & Disposal Services, which operates hazardous waste
disposal landfills and provides waste stabilization services for the electric
utility, steel and other industries.

Information by business segment for the three years ended December 31, 1995
follows (in thousands):

<TABLE>
<CAPTION>
                                        Industrial  Treatment
                                         Environ-      &       Corporate
                                          mental    Disposal    Head-
                                         Services   Services   quarters   Total  
                                         -------     -------   -------   -------

<C>                                    <C>        <C>        <C>         <C>
Revenues
 1995                                  $  222,043   $42,641              $ 264,684 
 1994                                     206,477    53,038                259,515 
 1993                                     197,268    73,758                271,026 
 ----------------------------------------------------------------------------------

<PAGE>
Operating income (loss)

1995 -- after unusual
  items, net (Note B)                   $  43,709  $  1,511   $(2,854)   $  42,366 
    Unusual items, net sub-
    tracted (added) above                   1,071       100    (3,628)      (2,457)
    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1994 -- after unusual item
  reclassifications 
  (Note B)                                 38,724     6,919    (5,924)      39,719 
    Unusual item
    reclassifications sub-
    tracted (added) above                     580      (580)
  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1993 -- after unusual 
  items, net (Note B)                      17,926    (5,269)   (4,004)       8,653 
    Unusual items, net sub-
    tracted (added) above                  14,000     7,600    (3,100)      18,500 
-------------------------------------------------------------------------------------
Identifiable assets
 1995                                   $ 300,588 $ 136,516 $  12,578    $ 449,682 
 1994                                     299,965   135,138    15,075      450,178 
 1993                                     300,278   111,328    15,639      427,245 
-------------------------------------------------------------------------------------
Depreciation and amortization
 1995                                   $  24,924 $   7,286  $  1,406   $   33,616 
 1994                                      23,738     9,988     1,282       35,008 
 1993                                      25,667    11,086     3,278       40,031 
-------------------------------------------------------------------------------------
Capital expenditures
 1995                                   $  26,134 $   6,345 $      81   $   32,560 
 1994                                      21,755    17,428        78       39,261 
 1993                                      19,752    12,963        53       32,768 

</TABLE>
Corporate headquarters expenses and assets support both segments but are not
directly associated with either.  Corporate assets consist principally of cash
and cash equivalents and unamortized debt issuance costs.  

Industrial Environmental Services revenues of approximately $41 million in
1995, $45 million in 1994 and $47 million in 1993 were from USX Corporation,
the Company's largest steel industry customer.  At December 31, 1995, $21.7
million of consolidated accounts receivable result from services performed
within the domestic steel industry.  Industrial Environmental Services steel
industry customers and operations are located throughout the United States and
Canada, and its aluminum industry customers and operations are in western
United States.  Treatment & Disposal Services landfills are in Idaho and Ohio. 
Foreign operations are not significant.

<PAGE>
The following table sets forth the percentage of total revenue contributed by
each class of services during the three years ended December 31, 1995:

<TABLE>
<CAPTION>
                                         1995        1994        1993   
                                         ----        ----        ----
<S>                                     <C>          <C>         <C>
Industrial recycling                    71.9%        67.3%       59.4%

Specialized services                    12.0         12.3        12.0 

Waste stabilization 
  and disposal                          13.1         17.8        17.2 

Stabilization system design, 
  supply and construction                3.0          2.6        10.0 

Discontinued services                                             1.4 

</TABLE>

<TABLE>
<CAPTION>
NOTE K -- INCOME TAXES
----------------------

The components of income tax expense are as follows (in thousands):

                                       1995          1994        1993     
                                       ----          ----        ----
<S>                                <C>          <C>         <C> 
Taxes payable:
  State                            $   1,001    $   2,310   $   2,280 
  Canadian                               261          266         269 
Federal taxes not 
  payable in cash                      4,346        1,704             
                                     -------      -------     ------- 
                                   $   5,608    $   4,280    $  2,549 
                                     =======      =======     ======= 

</TABLE>

Income tax expense varies from amounts computed by applying the 35% United
States federal income tax rate for the following reasons (in thousands):

<TABLE>
<CAPTION>
                                       1995         1994       1993   
                                       ----         ----       ----
<S>                                <C>          <C>         <C>
Expense (benefit) of pre-tax 
  income (loss) before extra-
  ordinary loss at statutory 
  rate                             $   5,639    $   5,369   $  (6,659)
Goodwill amortization                  1,733        1,751       1,942 
Effect of (reducing) increasing
  deferred tax valuation 
  allowance                           (2,253)      (4,375)      5,708 
Effects of state and Canadian
  income taxes                           683        1,535       1,558 
Other                                   (194)
                                     -------      -------     ------- 
                                   $   5,608    $   4,280   $   2,549 
                                     =======      =======     ======= 

</TABLE>

Canadian income before tax amounted to $.6 million in 1995 and $.7 million in
1994 and 1993.

Income tax expense includes $4.3 million in 1995 and $1.7 million in 1994 that
will never be paid in cash.  This expense is due to the origins of certain of 

<PAGE>
the Company's deferred tax assets and is described in the following
paragraphs.  

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes.  Total deferred federal
tax liabilities, assets and the valuation allowance net to zero and,
therefore, do not appear in the consolidated balance sheet.  They are as
follows (in thousands):

<TABLE>
<CAPTION>
                                                     December 31,     
                                                 -------------------
                                                   1995        1994   
                                                   ----        ----
<S>                                             <C>         <C>
Deferred tax liabilities                        $ (22,125)  $ (19,830)
Deferred tax assets                               146,550     150,854 
Valuation allowance                              (124,425)   (131,024)
                                                  -------     ------- 
  Net deferred taxes                            $     -0-   $     -0- 
                                                  =======     ======= 
</TABLE>
The valuation allowance was reduced by $6.6 million in 1995 and $6.1 million
in 1994.  Of these amounts $2.3 million and $4.4 million, respectively, were
credited to reduce income tax expense.  In both years the remaining valuation
allowance reductions were credited to reduce goodwill, resulting in federal
taxes not payable in cash, because the underlying temporary differences were
attributable to the IU International acquisition (Note I).  The valuation
allowance reductions occurred because (i) certain deferred tax assets were
recognized (as restructuring costs (Note C) and IU International acquisition
obligation payments became deductible for tax purposes), (ii) additions to
deferred tax liabilities made the realization of remaining deferred tax assets
more likely, and (iii) in 1995, there were net reductions of IU International
obligations as described in Note B.  In 1993 both net deferred tax assets and
the valuation allowance increased by $17 million, due primarily to additional
deferred tax assets (principally arising from the 1993 restructuring charge
and a 1993 tax net operating loss) and to the one percent federal tax rate
increase.

Significant components of the Company's deferred federal tax liabilities and
assets are as follows (in thousands):

<PAGE>
<TABLE>
<CAPTION>

                                                      December 31,    
                                                  --------------------
                                                 1995             1994   
                                                 ----             ----
<S>                                             <C>         <C>
Deferred tax liabilities:
  Tax over book depreciation plus
    IU International acquisition purchase 
    price allocation to property, plant 
    and equipment                               $ (11,671)  $ (11,594)
  Tax over book post-closure deductions            (6,483)     (4,494)
  Tax over book landfill permit 
    amortization                                   (3,747)     (3,596)
  Other                                              (224)       (146)
                                                  -------     ------- 
    Total deferred tax liabilities                (22,125)    (19,830)
                                                  -------     ------- 

Deferred tax assets:
  Net operating loss carryforwards                114,099     113,015 
  Capital loss carryforwards                        3,870       3,395 
  Allowance for a doubtful receivable
    and insurance accruals that would
    result in capital losses                        6,682       8,575 
  Other insurance accruals                          3,084       5,646 
  Restructuring charge                              1,108       3,144 
  Pension and other postretirement 
    benefits accruals                               5,012       5,368 
  Closure cost accruals                             3,304       3,065 
  Other accruals                                    9,391       8,646 
                                                  -------     ------- 
    Total deferred tax assets                     146,550     150,854 
  Valuation allowance                            (124,425)   (131,024)
                                                  -------     ------- 
   Net deferred tax assets                         22,125      19,830 
                                                  -------     ------- 
   Net deferred taxes                           $     -0-   $     -0- 
                                                  =======     ======= 

</TABLE>
Deferred tax assets represent reductions of future tax payments that would
otherwise be required as the Company reports taxable income.  The $114.1
million deferred tax asset listed above represents net operating loss
carryforwards of $326 million, which expire in various years as discussed in
the next paragraph.  Most of the $3.9 million deferred tax asset representing
capital loss carryforwards expires in 1998.  All the carryforwards are based
on the Company's consolidated federal income tax returns through 1994 and
estimated return amounts for 1995.  All the other deferred tax assets
represent items already reflected in the financial statements that will become
available to reduce future federal income taxes as they become deductible for
tax purposes.  

The $326 million of net operating loss carryforwards expire as follows: $76
million in 1996, $10 million in 1997, $147 million in 1998, $1 million in
2000, $15 million in 2003, $46 million in 2005, $11 million in 2006, $9
million in 2008, $8 million in 2009 and $3 million in 2010.  The
recapitalization described in Note D resulted in an "ownership change" (as
defined in the Internal Revenue Code) that could limit the future use of the
net operating loss carryforwards that expire through 2006.  However, based on
a comprehensive study of its overall federal tax position, the Company
believes that sufficient tax loss carryforwards will be available, together
with its other deferred tax assets, to enable it to pay only federal
alternative minimum tax, at an effective rate of approximately 2%, through
1998.  In addition, the Company expects to utilize its deferred tax assets to
reduce substantially its federal income tax payments for several years
thereafter.  The Internal Revenue Service has not examined the Company's tax
returns for years after 1979.  The effects of such examinations on the 
Company's tax loss carryforwards, if any, cannot currently be determined.

<PAGE>
A substantial portion of the deferred tax asset arising from net operating
loss carryforwards originated prior to the Company's 1983 reorganization.  In
accordance with applicable accounting principles, future tax benefits
associated with the pre-reorganization carryforwards will be excluded from net
income and credited to capital in excess of par value.  The Company also has
deferred tax assets arising from IU International acquisition obligations. 
Future tax benefits associated with these deferred tax assets will also be
excluded from net income, and will be credited to goodwill.  Utilization of
both of these types of deferred tax assets results in income tax expense that
will never be payable in cash.  Future tax benefits from deferred tax assets
arising from normal operations will reduce income tax expense.  Subject to the
limitations discussed in the preceding paragraph and the Company's ability to
generate sufficient future taxable income, upon realization of the net
deferred tax assets and liabilities, the $124.4 million valuation allowance
would be applied as follows: $82.6 million would be credited to capital in
excess of par value, $26.4 million would be credited to reduce goodwill and
$15.4 million would reduce income tax expense.  

Pursuant to Statement of Financial Accounting Standards No. 109, as of January
1, 1993 the Company adopted a new method of accounting for income taxes. 
Prior periods, accounted for under the provisions of Accounting Principles
Board Opinion No. 11, were not restated.  The cumulative effect of adopting
the new method was a non-cash charge in the consolidated statement of
operations of $2.3 million.  The  resulting $2.3 million liability was
eliminated by the recognition of offsetting tax benefits associated with
future tax deductible payments of liabilities recorded in connection with the
IU International acquisition.  Because these tax benefits were attributable to
deductible temporary differences that existed at the IU International
acquisition date, such benefits were applied to reduce goodwill.


NOTE L -- RETIREMENT PLANS
--------------------------

The Company has several non-contributory defined benefit pension plans
covering certain salaried and hourly employees.  The plans provide pension
benefits that are based on varying levels of service and compensation.  Assets
of the plans are principally common stocks, fixed income securities and cash
equivalents.  The Company's contributions are based on funding standards
established by the Employee Retirement Income Security Act of 1974.

<PAGE>
Net periodic pension cost for defined benefit plans includes the following (in
thousands):

<TABLE>
<CAPTION>
                                       1995          1994       1993   
                                       ----          ----       ----
<S>                                <C>          <C>         <C>              
Service cost -  benefits 
  earned during the period         $     787    $     868   $   1,036 
Interest cost on projected
  benefit obligations                  1,393        1,276       1,458 
Actual gain on plan assets            (2,860)        (238)     (2,204)
Net amortization and deferral          1,341       (1,083)        643 
                                      -------     -------     ------- 
Net periodic pension cost          $     661    $     823   $     933 
                                     =======      =======     ======= 
</TABLE>

<TABLE>
<CAPTION>
The funded status, calculated principally using measurement dates of October
31, 1995 and 1994, and the liability accrued in the consolidated balance sheet
for defined benefit plans are as shown below (in thousands):

                                                       December 31,    
                                                   -------------------
                                                    1995       1994   
                                                    ----       ----

<S>                                             <C>         <C>
Actuarial present value of
  benefit obligations:
   Vested                                       $  19,342   $  16,841 
                                                  -------     ------- 
   Accumulated                                  $  19,355   $  16,854 
                                                  -------     ------- 
   Projected                                    $  19,485   $  16,963 
Plan assets at fair value                          16,349      13,841 
                                                  -------     ------- 
Projected benefit obligations
  in excess of plan assets                          3,136       3,122 
Unrecognized net loss                              (2,633)     (2,301)
Prior service gain not yet recognized 
  in net periodic pension cost                      4,333       4,702 
Other                                                 311         182 
                                                  -------     ------- 
Pension liability                               $   5,147   $   5,705 
                                                  =======     ======= 
</TABLE>

The actuarial present value of projected benefit obligations was determined
using discount rates of 7.25% in 1995 and 8.5% in 1994. The expected annual
long-term rate of return on plan assets used in determining net periodic
pension cost was 8.5%.

The Company also sponsors several defined contribution retirement plans for
which contributions and costs are based on percentages of defined earnings of
participating employees.  Costs for these plans amounted to $1.6 million in
1995 and $1.5 million in 1994 and 1993.

In addition, for the benefit of certain unionized employees, the Company
participates in defined benefit multiemployer pension plans, for which
reliable information concerning the Company's share of related estimated plan
benefits and assets is not available, and defined contribution multiemployer
pension plans.  Costs for multiemployer pension plans amounted to $1.7 million
in 1995, 1994 and 1993.

<PAGE>
In addition to pension plans, the Company has several defined benefit
postretirement plans that provide varying amounts of medical and death
benefits, primarily to retired employees.  Pursuant to Statement of Financial
Accounting Standards No. 106 ("SFAS No. 106"), in the first quarter of 1993
the Company changed its method of accounting for these postretirement
benefits.  The cumulative effect of this accounting change was immaterial and
is being recognized on a prospective basis.  The actuarially computed cost for
these plans amounted to $.5 million in 1995 and $.4 million in 1994 and 1993. 
The Company funds the postretirement benefits on a "pay-as-you-go" basis.

The Company also participates in several defined contribution multiemployer
plans that provide health care and other welfare benefits to certain unionized
employees during their working lives and after retirement.  Costs for these
plans, which includes both current and postretirement benefit costs, amounted
to $1.7 million in 1995, $1.6 million in 1994 and $1.4 million in 1993.

At each of December 31, 1995 and 1994, other long-term liabilities includes
approximately $5 million of accrued postretirement benefit obligations, based
on discount rates of 7.25% in 1995 and 8.5% in 1994.  Such amount, recorded in
connection with the 1988 IU International acquisition, approximates the
accumulated postretirement obligations under SFAS No. 106.

Future cost increases in health care benefits covered by the plans are assumed
to be 12% in 1996, decreasing 1% per year to 5% in 2002 and remaining at that
level thereafter.  Increasing these rates by one percentage point in each year
would increase the accumulated postretirement benefit obligation as of
December 31, 1995 by $.3 million and would not have had a material impact on
the cost for 1995.


NOTE M -- SUPPLEMENTAL CASH FLOW INFORMATION
--------------------------------------------

Amortization in the consolidated statement of cash flows includes amortization
of goodwill, landfill permits and deferred charges related to landfill closure
together with noncash interest costs.  

<TABLE>
<CAPTION>
Changes in working capital include the following (in thousands):

                                          1995        1994      1993   
                                          ----        ----      ----
<S>                                   <C>        <C>        <C>
Accounts receivable                   $   7,221  $  (8,483) $   1,270 
Other current assets                       (549)        38     (1,279)
Trade payables and other
  current liabilities                    (6,304)     4,366     (1,496)
                                        -------    -------    ------- 
Cash provided (used)                  $     368  $  (4,079) $  (1,505)
                                        =======    =======    ======= 

</TABLE>
<PAGE>

<TABLE>
<CAPTION>
Closure trust fund payments include the following activity (in thousands):

                                          1995       1994       1993   
                                          ----       ----       ----
<S>                                   <C>        <C>        <C>
Purchases of investments              $ (17,643) $ (16,193) $ (12,110)
Sales of investments                      8,556      3,327      6,936 
                                        -------    -------    ------- 
Net cash used                         $  (9,087) $ (12,866) $  (5,174)
                                        =======    =======    ======= 
</TABLE>

Ongoing net cash flows related to the IU International acquisition are
principally payments of non-recurring pre-acquisition obligations.

The Company paid interest of $26.3 million in 1995, $23.7 million in 1994 and
$30.7 million in 1993, excluding amounts capitalized.  Interest costs of $.2
million in 1995 and $.6 million in 1994 and in 1993 were capitalized.

The Company paid income taxes, net of refunds, of $1.2 million in 1995, $1.6
million in 1994 and $1.4 million in 1993.


NOTE N -- FINANCIAL INSTRUMENTS
-------------------------------

The Company has not utilized any derivative financial instruments since before
1993.  The Company considers the use of such instruments when appropriate to
mitigate risks.

<TABLE>
<CAPTION>

The estimated fair values of financial instruments carried in the Company's
consolidated balance sheet are as follows (in thousands):

                                           December 31,               
                                 ---------------------------------
                                     1995                1994      
                             --------------------- ---------------------
Consolidated Balance          Fair     Carrying     Fair     Carrying
  Sheet Caption              Values     Amounts    Values     Amounts 
------------------------------------------------------------------------
<S>                         <C>        <C>        <C>        <C>
Other current assets        $ 1,195    $ 1,195    $   780    $   780 
Closure trust fund
  (Idaho)                    11,346     11,356      9,333      9,748 
Other non-current 
  assets                      2,764      2,824      2,479      2,499 
Insurance obligations         6,257      6,257      8,113      8,113 
Other current 
  liabilities                    64         64      6,692      6,692 
Current portion of debt       9,397      9,397      9,044      9,044 
Redeemable preferred
  stock                      32,764     33,092     27,345     31,396 
Other non-current
  liabilities                 6,333      8,787      9,944     14,689 
Long-term debt              252,092    275,158    233,582    260,423 
--------------------------------------------------------------------
</TABLE>

<PAGE>
The fair values of financial instruments included in current assets and
liabilities approximate their carrying amounts.  The fair values of fixed-rate
long-term debt and Class G redeemable preferred stock, which are thinly
traded, are based on management's best knowledge of recent trading prices. 
The fair values of other non-current assets and liabilities are estimated
using discounted cash flow analysis and borrowing rates in the Company's bank
credit facility. 


NOTE O -- COMMITMENTS AND CONTINGENCIES
---------------------------------------

Future minimum lease payments for non-cancelable operating leases as of
December 31, 1995 amount to $8.3 million in 1996, $7.1 million in 1997, $6.2
million in 1998, $4.3 million in 1999, $2.0 million in 2000 and $.9 million
thereafter.  Operating leases are primarily for machinery and equipment. 
Rental expense was $10.2 million in 1995, $7.8 million in 1994 and $6.9
million in 1993.

The Company has made commitments to spend $8 million in 1996 for equipment
additions.  To secure its obligations to close its Idaho landfill and perform
post-closure monitoring and maintenance procedures, the Company must deposit
into a closure trust fund approximately $1 million annually through 1998.  The
Company believes these payments together with those previously made will
satisfy substantially all of its landfill closure and post-closure
obligations, based on current regulations and permitted capacity.

At December 31, 1995, the Company was contingently liable for $43.4 million of
letters of credit outstanding under its bank credit agreement, including a
$34.1 million letter of credit that guarantees payment for the redemption or
retirement of the Class G preferred stock by July 15, 1996 (Note F).  Of the
remaining $9.3 million, approximately $5 million is to secure other
liabilities already reflected in the consolidated balance sheet.  

IU International Corporation ("IU International") sold P-I-E Nationwide, Inc.
("PIE") in 1985.  PIE commenced bankruptcy proceedings in 1990 and ceased
operations, which triggered withdrawal liabilities to certain multiemployer
pension plans, estimated by PIE in 1990 to aggregate $58 million.  In 1991 the
trustees of the largest plan sought information from the Company for the
stated purpose of determining whether the circumstances of IU International's
1985 sale of PIE would justify a claim against the Company for any
deficiencies in PIE's payment of withdrawal liabilities to such plan.  Such
plan did not again contact the Company concerning this matter until March 15,
1995, when the Company was advised that such plan's consideration as to
whether it would assert a claim is ongoing.  The Company believes any such
claim is unwarranted and, if such claim were asserted, would contest any such
claim vigorously.  The Company believes it will ultimately prevail on the
merits.  However, under the Multiemployer Pension Plan Amendments Act of 1980,
the federal statute governing such plans, the plan trustees could require the 

<PAGE>
Company to make substantial monthly payments before any issues are arbitrated
or litigated.  If onerous monthly payments are imposed by the plan, the
Company will take any and all actions it deems necessary and appropriate to
protect itself until the matter can be arbitrated and/or litigated on its
merits.  The Company continues to believe that the underlying facts and 
circumstances support a conclusion that these matters will be resolved with no
material adverse effect on its financial condition.  However, the resolution
of such matters, which potentially could take place in the current fiscal
year, could result in a charge that is material to results of operations and
cash flows in a single accounting period.

The Company's Ohio and Idaho facilities hold operating permits issued by state
and federal environmental agencies under the Resource Conservation and
Recovery Act, as amended, that require renewal and modification from time to
time.  The Company expects that it will obtain the renewals and modifications
to its permits that it requires to continue to provide landfill capacity in
its approved disposal cells well into the next decade.

The Company and its competitors and customers are subject to a complex,
evolving array of federal, state and local environmental laws and regulations. 
In particular, such requirements not only can affect the demand for treatment
and disposal services, but could also require the Company to incur significant
costs for such matters as facility upgrading, remediation or other corrective
action, facility closure and post-closure maintenance and monitoring.  It is
possible that the future imposition of such requirements could have a material
adverse effect on the Company's results of operations or financial condition,
but the Company believes that the consolidated financial statements
appropriately reflect all presently known compliance costs in accordance with
generally accepted accounting principles.  

The Company is a party to litigation and proceedings arising in the normal
course of its present or former businesses.  In the opinion of management, the
outcome of such matters will not have a material adverse effect on the
Company's financial condition or results of operations.

<TABLE>
<CAPTION>

NOTE P -- SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
------------------------------------------------------
(In thousands, except per share amounts)

                         Mar. 31    June 30     Sept. 30    Dec. 31 
---------------------------------------------------------------------
<S>                    <C>         <C>          <C>         <C>
1995
----
Revenues               $  70,823   $  66,533    $  64,822   $  62,506 
Gross profit              17,070      17,140       17,293      16,798 
Operating income           9,611      11,183       11,296      10,276 
Income before extra-
 ordinary loss             1,575       3,313        3,138       2,478 
Net income                 1,575       3,313        3,138       1,672 
Income per share
 before extraordinary
 loss                        .03         .07          .07         .05 
----------------------------------------------------------------------

<PAGE>
1994
----
Revenues               $  58,423   $  63,458    $  66,001   $  71,633 
Gross profit              14,049      17,723       18,558      20,602 
Operating income           6,255       9,275       11,052      13,137 
Net income (loss)           (470)      2,316        3,340       5,873 
Income (loss)
  per share                 (.02)        .05          .07         .16 
----------------------------------------------------------------------
</TABLE>

1995 operating income benefitted from the unusual items discussed in Note B. 
Such benefit was $.8 million in the June quarter, $1.2 million in the
September quarter and $.5 million in the December quarter.  After the
disproportionate effect of federal taxes not payable in cash, these items
affected net income and per share amounts as follows:  in the June quarter $.5
million income ($.01 per share), in the September quarter $.1 million loss (no
per share effect) and in the December quarter $1.5 million loss ($.04 per
share).  Also, fourth quarter operating income and net income benefitted by $1
million ($.03 per share) from reduced expected closure costs at an inactive
landfill site.

Except for the disproportionate tax effects of the unusual items in 1995, full
year income tax expense was lower than originally expected in both 1995 and
1994.  Consequently, December quarter net income benefitted by $.8 million or
$.02 per share in 1995 and $1 million or $.02 per share in 1994.

In 1994 preferred stock retirement gains amounted to $.01 per share in the
March quarter and $.03 per share in the December quarter.  

<PAGE>
<TABLE>
<CAPTION>
                                           ENVIROSOURCE, INC.                                 SCHEDULE II

                                    VALUATION AND QUALIFYING ACCOUNTS

                              Years ended December 31, 1995, 1994 and 1993
                                         (Dollars in thousands)


                                                      Additions   
                                                 ------------------
                                   Balance at  Charged to    Charged to                 Balance at
                                   beginning   costs and        other                     end of  
    Description                    of period   expenses       accounts    Deductions (A)  period 
    -----------                    ---------   --------       --------    ----------      ------      

       <S>                        <C>         <C>                         <C>               <C>
       1995
       ----

       Allowance for doubtful 
        accounts                  $      616  $      149                  $       36        $ 729
                                     =======     =======                     =======      =======

       1994
       ----

       Allowance for doubtful 
        accounts                  $      944  $       143                  $      471       $ 616
                                     =======      =======                     =======     =======


        1993
        ----

        Allowance for doubtful 
         accounts                 $    1,333  $      (127)                 $      262       $ 944
                                     =======      =======                     =======     =======

(A)  Amounts written off.
</TABLE>

<PAGE>
<TABLE>
<CAPTION>

                       EXHIBIT INDEX

Number              Exhibit                    Page
-----               -------                    ----

<S>      <C>                                   <C>     
 4.14    Credit Agreement, dated as of         EXHIBIT 1
         December 19, 1995, among the
         Company, International Mill
         Service, Inc., the lenders
         parties thereto, NationsBank,
         N.A., as Administrative Agent,
         and Credit Lyonnais, as Syndication
         Agent.

10.13    Stock Option Agreements, dated        EXHIBIT 2
         July 1, 1995, between the Company
         and Wallace B. Askins and Arthur
         R. Seder.

10.14    Stock Option Agreements, dated        EXHIBIT 3
         January 1, 1996, between the
         Company and Arthur R. Seder, Jr.,
         Wallace B. Askins, Raymond P. 
         Caldiero and Jeffrey G. Miller.   

21.1     Subsidiaries of the Company.          EXHIBIT 4

23.1     Consent of Ernst & Young.             EXHIBIT 5
</TABLE>