10-Q

2012

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.   20549

FORM 10-Q

[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2012

[    ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the transition period from to 

Commission file number 1-14105

AVALON HOLDINGS CORPORATION

(Exact name of registrant as specified in its charter)

Ohio	34-1863889
(State or other jurisdiction	(I.R.S. Employer
of incorporation or organization)	Identification No.)
One American Way, Warren, Ohio	44484-5555
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code:  (330) 856-8800

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

Indicate by check mark whether the registrant has submitted electronically and posted on its Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T ( 232.405 of this chapter) during the preceding 12 months ( or for such shorter period that the registrant was required to submit and post such files). Yes þ    No ¨

Indicate by a check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check one):

Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer ¨	Smaller reporting company þ

Indicate by a check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No þ

The registrant had 3,191,038 shares of its Class A Common Stock and 612,293 shares of its Class B Common Stock outstanding as of August 8, 2012.

AVALON HOLDINGS CORPORATION AND SUBSIDIARIES

INDEX

	Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2012 and 2011 (Unaudited)	3
Condensed Consolidated Balance Sheets at June 30, 2012 (Unaudited) and December 31, 2011	4
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2012 and 2011 (Unaudited)	5
Notes to Condensed Consolidated Financial Statements (Unaudited)	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3. Quantitative and Qualitative Disclosures about Market Risk	21
Item 4. Controls and Procedures	21
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	22
Item 2. Changes in Securities and Use of Proceeds	22
Item 3. Defaults upon Senior Securities	22
Item 4. Mine Safety Disclosures	22
Item 5. Other Information	22
Item 6. Exhibits and Reports on Form 8-K	22
SIGNATURE	23

PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

AVALON HOLDINGS CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Operations (Unaudited)

(in thousands, except per share amounts)

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Net operating revenues	$	12,609		$	11,375		$	23,547		$	21,269
Costs and expenses:
Costs of operations		10,195			9,354			19,231			17,589
Depreciation and amortization		407			416			820			835
Selling, general and administrative expenses		1,781			1,691			3,719			3,323
Operating income (loss)		226			(86	)		(223	)		(478	)
Other income (expense):
Interest expense		(4	)		(4	)		(7	)		(7	)
Interest income		1			1			2			3
Other income, net		70			177			145			243
Income (loss) before income taxes		293			88			(83	)		(239	)
Provision for income taxes		19			11			36			24
Net income (loss)	$	274		$	77		$	(119	)	$	(263	)
Net Income (loss) per share – basic	$	.07		$	.02		$	(.03	)	$	(.07	)
Net Income (loss) per share – diluted	$	.07		$	.02		$	(.03	)	$	(.07	)
Weighted average shares outstanding – basic		3,803			3,803			3,803			3,803
Weighted average shares outstanding – diluted		4,108			3,869			3,803			3,803

See accompanying notes to condensed consolidated financial statements.

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AVALON HOLDINGS CORPORATION AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(in thousands, except per share amounts)

	June 30, 2011			December 31, 2012
	(Unaudited)
Assets:
Current Assets:
Cash and cash equivalents	$	6,961		$	7,324
Accounts receivable, net		9,712			12,885
Prepaid expenses		293			281
Refundable income taxes		2			2
Other current assets		910			717
Total current assets		17,878			21,209
Property and equipment, less accumulated depreciation and amortization of $11,934 in 2012 and $11,321 in 2011		25,630			26,079
Leased property under capital leases, less accumulated depreciation and amortization of $2,725 in 2012 and $2,539 in 2011		6,700			5,984
Noncurrent deferred tax asset		8			8
Other assets, net		108			87
Total assets	$	50,324		$	53,367
Liabilities and Shareholders’ Equity
Current Liabilities:
Current portion of obligations under capital leases	$	1		$	1
Accounts payable		5,927			9,643
Accrued payroll and other compensation		615			755
Accrued income taxes		7			20
Other accrued taxes		168			260
Deferred revenues		2,862			2,105
Other liabilities and accrued expenses		506			406
Total current liabilities		10,086			13,190
Obligations under capital leases		227			227
Shareholders’ Equity:
Class A Common Stock, $.01 par value		32			32
Class B Common Stock, $.01 par value		6			6
Paid-in capital		58,593			58,413
Accumulated deficit		(18,620	)		(18,501	)
Total shareholders’ equity		40,011			39,950
Total liabilities and shareholders’ equity	$	50,324		$	53,367

See accompanying notes to condensed consolidated financial statements.

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AVALON HOLDINGS CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited)

(in thousands)

	Six Months Ended June 30,
	2012			2011
Operating activities:
Net loss	$	(119	)	$	(263	)
Reconciliation of loss to cash provided by (used in) operating activities:
Depreciation and amortization		820			835
Compensation costs – stock options		180			93
Provision for losses on accounts receivable		19			8
Gain from disposal of property and equipment		(1	)		(106	)
Change in operating assets and liabilities:
Accounts receivable		3,154			348
Prepaid expenses		(12	)		97
Other current assets		(193	)		(222	)
Other assets, net		(21	)		—
Accounts payable		(4,097	)		(317	)
Accrued payroll and other compensation		(140	)		302
Accrued income taxes		(13	)		2
Other accrued taxes		(92	)		(55	)
Deferred revenues		757			493
Other liabilities and accrued expenses		100			54
Net cash provided by operating activities		342			1,269
Investing activities:
Capital expenditures		(708	)		(1,024	)
Proceeds from disposal of property and equipment		3			355
Net cash used in investing activities		(705	)		(669	)
(Decrease) increase in cash and cash equivalents		(363	)		600
Cash and cash equivalents at beginning of year		7,324			5,565
Cash and cash equivalents at end of period	$	6,961		$	6,165
Non-cash investing activities:
Capital expenditures included in Accounts payable	$	381		$	120

 

See accompanying notes to condensed consolidated financial statements.

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AVALON HOLDINGS CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

June 30, 2012

Note 1.  Basis of Presentation

The unaudited condensed consolidated financial statements of Avalon Holdings Corporation and subsidiaries (collectively “Avalon”) and related notes included herein have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission.  Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted consistent with such rules and regulations.  The accompanying unaudited condensed consolidated financial statements and related notes should be read in conjunction with the consolidated financial statements and related notes included in Avalon’s 2011 Annual Report to Shareholders.

In the opinion of management, these unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the financial position of Avalon as of June 30, 2012, and the results of its operations and cash flows for the interim periods presented.

The operating results for the interim periods are not necessarily indicative of the results to be expected for the full year.

Avalon evaluated subsequent events through the date the financial statements were issued.

Note 2.  Net Income (Loss) per Share

Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the periods presented, which was 3,803,331 for each period.

Diluted net income (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding plus any weighted common equivalent shares determined to be outstanding during the period using the treasury method. The weighted common equivalent shares included in the calculation are related to the stock options granted by Avalon where the weighted average market price of Avalon’s common stock for the period presented is greater than the option exercise price of the stock option. For the three months ended June 30, 2012 and 2011, the dilutive weighted average number of shares outstanding was 4,107,945 and 3,868,557, respectively. Although there were common equivalent shares outstanding for the six months ended June 30, 2012 and 2011, the diluted per share amounts reported are equal to basic per share amounts because Avalon was in a net loss position and as a result, such dilution would be considered anti-dilutive. Assuming dilution, the weighted average number of common shares outstanding for the six months ended June 30, 2012 and 2011 were 4,070,087, and 3,885,157, respectively.

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Note 3. Credit Facility

On March 21, 2008, Avalon entered into a $3.5 million unsecured line of credit agreement with The Huntington National Bank. Avalon has never borrowed monies under the line of credit. On April 26, 2011 the line of credit was reduced to $1 million. Interest on borrowings accrues at LIBOR plus 1.75%. The agreement provides for a minimum interest rate of 3.25%.  The line of credit is renewed annually and contains certain financial and other covenants, customary representations, warranties and events of defaults. At June 30, 2012 and December 31, 2011, there were no borrowings under the line of credit.

Note 4. Income Taxes

Avalon recorded net income of $274,000 in the second quarter of 2012 compared with net income of $77,000 in the second quarter of 2011. Avalon recorded a state income tax provision in both the second quarter of 2012 and 2011, which was related entirely to the waste management and brokerage operations. Excluding the effect of this state tax provision, Avalon’s overall effective tax rate was 0% in the second quarter of 2012 and 2011. The income tax provision recorded for the second quarter of 2012 and 2011 was offset by a change in the valuation allowance. The overall effective tax rate is different than statutory rates primarily due to a change in the valuation allowance. A valuation allowance is provided when it is more likely than not that deferred tax assets relating to certain federal and state loss carryforwards will not be realized. Avalon continues to maintain a valuation allowance against the majority of its deferred tax amounts until it is evident that the deferred tax asset will be utilized in the future.

Avalon incurred a net loss of $.1 million for the first six months of 2012 compared with net loss of $.3 million for the first six months of 2011. Excluding the effect of the state income tax provisions relating to the waste management and brokerage operations, Avalon’s overall effective tax rate was 0% in the first six months of 2012 and 2011. The income tax benefits recorded for the first six months of 2012 and 2011 were offset by a change in the valuation allowance. The overall effective tax rate is different than statutory rates primarily due to a change in the valuation allowance. A valuation allowance is provided when it is more likely than not that deferred tax assets relating to certain federal and state loss carryforwards will not be realized. Avalon continues to maintain a valuation allowance against the majority of its deferred tax amounts until it is evident that the deferred tax asset will be utilized in the future.

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Note 5. Long-term Incentive Plan

The purpose of the Avalon Holdings Corporation 2009 Long-term Incentive Plan (the “Plan”) is (a) to improve individual employee performance by providing long-term incentives and rewards to employees of Avalon, (b) to assist Avalon in attracting, retaining and motivating employees and non-employee directors with experience and ability, and (c) to associate the interests of such employees and directors with those of the Avalon shareholders. Under the Plan, 1,300,000 shares have been reserved for the issuance of stock options. During the first quarter of 2010, 980,000 stock options were granted under the Plan. Of these options granted, 450,000 were forfeited in February 2011 and 50,000 cancelled in March 2011. In March 2011, 280,000 stock options were granted under the Plan. The stock options, vest ratably over a five year period and have a contractual term of ten years from the date of grant. At the end of each contractual vesting period, the share price of the Avalon common stock, traded on a public stock exchange (NYSE Amex), must reach a predetermined price within three years following such contractual vesting period before the stock options are exercisable (See table below). If the Avalon common stock price does not reach the predetermined price, the stock options will either be cancelled or the period will be extended at the discretion of the Board of Directors.

The Monte Carlo Simulation was selected to determine the fair value because it incorporates six minimum considerations;  1) the exercise price of the option, 2) the expected term of the option, taking into account both the contractual term of the option, the effects of employees’ expected exercise and post-vesting employment termination behavior, as well as the possibility of change in control events during the contractual term of the option agreements, 3) the current fair value of the underlying equity, 4) the expected volatility of the value of the underlying share for the expected term of the option, 5) the expected dividends on the underlying share for the expected term of the option and 6) the risk-free interest rate(s) for the expected term of the option.

The expected term, or time until the option is exercised is typically based on historical exercising behavior of previous option holders of a company’s stock. Due to the fact that no options have been exercised as of yet, and therefore no historical exercising behavior available, an alternative method was used. Because of the nature of the vesting as described above, the options were separated into five blocks, with each block having its own vesting period and expected term. Assuming the vesting occurs ratably over the vesting period for each option block, the average vesting term (requisite service period) for each option block was calculated to be 2.54, 3.54, 4.54, 5.54 and 6.54 years for option blocks 1 through 5, respectively. As such, the expected terms were calculated to be 6.27, 6.77, 7.27, 7.77 and 8.27 years, for option blocks 1 through 5, respectively.

The current fair value of the underlying equity was determined to be equal to Avalon’s publicly traded stock price as of the grant dates times the sum of the Class A and Class B common shares outstanding.

The expected volatility was based on the observed volatility of Avalon common stock for a five year period prior to the grant dates. The expected volatility that was used ranged from 60.9% to 61.7% with a weighted average expected volatility of 61.2%.

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There were no expected dividends and the risk-free interest rate(s), which ranged from 2.06% to 2.28%, were based on yield data for U. S. Treasury securities over a period consistent with the expected term.

The following information is a summary of the stock option activity:

Options outstanding at January 1, 2012	760,000
Options forfeited	0
Options cancelled	0
2012 Options granted	0
Total options outstanding at June 30, 2012	760,000
Options Vested	248,000
Options Exercisable	248,000

Number of Options Granted	Weighted Average Exercise Price		Weighted Average Fair Value at Grant Date
760,000	$	2.63	$	1.09

The stock options vest and become exercisable based upon achieving two critical metrics as follows:

1) Contract Vesting Term:  The stock options vest ratably over a five year period.

2) The Avalon common stock price traded on a public stock exchange (NYSE Amex) must reach the predetermined vesting price within three years after the options become vested under the Contract Vesting Term.

The table below represents the period and predetermined stock price needed for vesting.

	Begins Vesting (mo. after Grant Dates)		Ends Vesting (mo. after Grant Dates)		Predetermined Vesting Price
Block 1		12		48	$	3.43
Block 2		24		60	$	4.69
Block 3		36		72	$	6.43
Block 4		48		84	$	8.81
Block 5		60		96	$	12.07

Compensation cost was approximately $27,000 and $52,000 for the three months ended June 30, 2012 and 2011, respectively, and $180,000 and $93,000 for the six months ended June 30, 2012 and 2011, respectively, based upon the estimated fair value calculation. The increase in compensation expense for the six months ended June 30, 2012 was due to the fact that during the first quarter of 2012, the predetermined vesting prices of $3.43 and $4.69 for the Avalon common stock were reached for Block 1 and Block 2.  Therefore, any options that had vested in Block 1 and Block 2 became exercisable and the remaining compensation expense relating to those exercisable options was recognized in the first quarter. The deferred tax benefit recorded was offset by an increase to the valuation allowance. As a result of recognizing the compensation expense relating to Block 1 and Block 2 on an accelerated basis, the compensation expense for the second quarter ended June 30, 2012 was substantially lower compared with the prior year second quarter. As of June 30, 2012, there was $.3 million of total unrecognized compensation costs related to non-vested share-based compensation arrangements granted under the Plan. That cost is expected to be recognized over a weighted-average period of 3.49 years.

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Note 6. Legal Matters

In the ordinary course of conducting its business, Avalon becomes involved in lawsuits, administrative proceedings and governmental investigations, including those related to environmental matters.  Some of these proceedings may result in fines, penalties or judgments being assessed against Avalon which, from time to time, may have an impact on its business and financial condition.  Although the outcome of such lawsuits or other proceedings cannot be predicted with certainty, Avalon does not believe that any uninsured ultimate liabilities, fines or penalties resulting from such pending proceedings, individually or in the aggregate, will have a material adverse effect on its liquidity, financial position or results of operations.

Note 7.  Business Segment Information

Avalon’s reportable segments include waste management services and golf and related operations. In determining the segment information, Avalon considered its operating and management structure and the types of information subject to regular review by its “chief operating decision maker.”  On this basis, Avalon’s reportable segments include waste management services and golf and related operations.  Avalon accounts for intersegment net operating revenues as if the transactions were to third parties.  The segment disclosures are presented on this basis for all years presented.

Avalon’s primary business segment, the waste management services segment, provides hazardous and nonhazardous waste disposal brokerage and management services to industrial, commercial, municipal and governmental customers, manages a captive landfill for an industrial customer and sells construction mats.  The golf and related operations segment includes the operations of golf courses, clubhouses that provide recreational, dining and banquet facilities and a travel agency.  Revenue for the golf and related operations segment consists primarily of membership dues, green fees, cart rentals, merchandise, and food and beverage sales.  Revenue related to membership dues are recognized proportionately over twelve months.  The unrecognized or deferred revenues relating to membership dues at June 30, 2012 and December 31, 2011 were $2.9 million and $2.1 million, respectively. Avalon does not have significant operations located outside the United States and, accordingly, geographical segment information is not presented.

For the six months ended June 30, 2012 no customer accounted for 10% or more of Avalon’s consolidated net operating revenues. For the six months ended June 30, 2011 one customer accounted for 14% of the waste management services segment’s net operating revenues to external customers and 11% of Avalon’s consolidated net operating revenues.  In addition, Avalon’s captive landfill management business is dependent upon a single customer as its sole source of revenue.

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The accounting policies of the segments are consistent with those described for the consolidated financial statements in the summary of significant accounting policies.  Avalon measures segment profit for internal reporting purposes as income (loss) before taxes.  Business segment information including the reconciliation of segment income before taxes to income (loss) before taxes is as follows (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Net operating revenues from:
Waste management services:
External customers revenues	$	9,114		$	8,402		$	18,052		$	16,609
Intersegment revenues		1			—			1			—
Total waste management services		9,115			8,402			18,053			16,609
Golf and related operations:
External customers revenues		3,495			2,973			5,495			4,660
Intersegment revenues		28			25			38			33
Total golf and related operations		3,523			2,998			5,533			4,693
Segment operating revenues		12,638			11,400			23,586			21,302
Intersegment eliminations		(29	)		(25	)		(39	)		(33	)
Total net operating revenues	$	12,609		$	11,375		$	23,547		$	21,269
Income (loss) before taxes:
Waste management services	$	800		$	690		$	1,523		$	1,374
Golf and related operations		91			(114	)		(262	)		(508	)
Segment income before taxes		891			576			1,261			866
Corporate interest income		1			1			2			3
Corporate other income, net		8			115			17			124
General corporate expenses		(607	)		(604	)		(1,363	)		(1,232	)
Income (loss) before taxes	$	293		$	88		$	(83	)	$	(239	)
Interest income:
Waste management services	$	—		$	—		$	—		$	—
Golf and related operations		—			—			—			—
Corporate		1			1			2			3
Total	$	1		$	1		$	2		$	3

	June 30, 2012			December 31, 2011
Identifiable assets:
Waste management services	$	13,709		$	16,869
Golf and related operations		31,508			30,140
Corporate		40,941			41,840
Subtotal		86,158			88,849
Elimination of intersegment receivables		(35,834	)		(35,482	)
Total	$	50,324		$	53,367

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In comparing the identifiable assets at June 30, 2012 with those at December 31, 2011, the decrease in identifiable assets of the waste management services segment of $3.2 million is primarily due to a decrease in accounts receivable as a result of lower net operating revenues of the waste brokerage and management services business in the second quarter of 2012 compared with the fourth quarter of 2011. Net operating revenues of the waste brokerage and management services business were $8.5 million in the second quarter of 2012 compared with $13.9 million in the fourth quarter of 2011. The increase in identifiable assets of the golf and related operations segment of $1.4 million is primarily due to capital expenditures made during the first six months of 2012 and an increase in accounts receivable at June 30, 2012 compared with December 31, 2011.
 

Note 8.  Recently Adopted Accounting Pronouncements

Effective January 1, 2012, Avalon adopted the FASB’s ASU No. 2011-05, Presentation of Comprehensive Income (Topic 220). The adoption of this accounting guidance did not have an impact on Avalon’s financial position, results of operations or cash flows. As required by the new standard, the Condensed Consolidated Statement of Comprehensive Income is included in the Condensed Consolidated Financial Statements.

Effective January 1, 2012, Avalon adopted the FASB’s ASU No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in US GAAP and IFRSs, which amends ASC 820, Fair Value Measurement. This ASU requires the categorization by level for items that are required to be disclosed at fair value, information about transfers between Level 1 and Level 2 and additional disclosure for Level 3 measurements. In addition, the ASU provides guidance on measuring the fair value of financial instruments managed within a portfolio and the application of premiums and discounts on fair value measurements. The adoption of this accounting guidance did not have an impact on Avalon’s consolidated financial statements.

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ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion provides information which management believes is relevant to an assessment and understanding of the operations and financial condition of Avalon Holdings Corporation and its subsidiaries.  As used in this report, the term “Avalon” means Avalon Holdings Corporation and its wholly owned subsidiaries, taken as a whole, unless the context indicates otherwise.

Statements included in Management’s Discussion and Analysis of Financial Condition and Results of Operations which are not historical in nature are intended to be, and are hereby identified as, ‘forward looking statements’.  Avalon cautions readers that forward looking statements, including, without limitation, those relating to Avalon’s future business prospects, revenues, working capital, liquidity, capital needs, interest costs, and income, are subject to certain risks and uncertainties that could cause actual results to differ materially from those indicated in the forward looking statements, due to risks and factors identified herein and from time to time in Avalon’s reports filed with the Securities and Exchange Commission.  

Liquidity and Capital Resources

For the first six months of 2012, Avalon utilized existing cash and cash provided from operations to fund capital expenditures and meet operating needs.

Avalon’s aggregate capital expenditures in 2012 are expected to be in the range of $1.2 million to $1.5 million.  Such expenditures will principally relate to building and land improvements and equipment purchases for the golf and related operations. During the first six months of 2012, capital expenditures for Avalon totaled approximately $1.1 million, which principally related to building and land improvements for the golf and related operations.

Avalon entered into a long-term agreement with Squaw Creek Country Club to lease and operate its golf course and related facilities.  The lease, which commenced November 1, 2003, has an initial term of ten (10) years with four (4) consecutive ten (10) year renewal term options unilaterally exercisable by Avalon.  Under the lease, Avalon is obligated to pay $15,000 in annual rent and make leasehold improvements of $150,000 per year.  Amounts expended by Avalon for leasehold improvements during a given year in excess of $150,000 will be carried forward and applied to future leasehold improvement obligations.  Based upon the amount of leasehold improvements already made and leasehold improvements anticipated to be made in the future, Avalon expects to exercise all of its renewal options.

Working capital was $7.8 million at June 30, 2012 and $8.0 million at December 31, 2011.

The decrease in accounts receivable at June 30, 2012 compared with December 31, 2011 is primarily due to lower net operating revenues of the waste management services segment in the second quarter of 2012 compared with the fourth quarter of 2011, partially offset by an increase in accounts receivable of the golf and related operations segment. The waste management services segment recorded net operating revenues of $9.1 million in the second quarter of 2012 compared with $14.6 million in the fourth quarter of 2011.

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The increase in other current assets at June 30, 2012 compared with December 31, 2011 is primarily a result of higher inventories of the golf and related operations segment during the golf season.

The decrease in accounts payable at June 30, 2012 compared with December 31, 2011 is primarily due to a decrease in amounts due disposal facilities and transportation carriers of the waste brokerage and management services as a result of significantly lower net operating revenues of the waste brokerage and management services business in the second quarter of 2012 compared with the fourth quarter of 2011 and the timing of payments to vendors in the ordinary course of business.

The decrease in accrued payroll and other compensation is primarily due to the payment of bonuses and incentives of the waste brokerage and management services business in the first quarter of 2012 that were accrued at December 31, 2011, partially offset by the accrual of such bonuses and incentives during the second quarter of 2012.

The increase in deferred revenues at June 30, 2012 compared with December 31, 2011 is due to an increase in the unrecognized or deferred revenues associated with membership dues of the golf and related operations segment. Revenues related to membership dues are recognized proportionately over twelve months based upon the anniversary date of each membership. Such deferred revenues increased to $2.9 million at June 30, 2012 compared with $2.1 million at December 31, 2011.

Management believes that anticipated cash provided from future operations, existing working capital, as well as Avalon’s ability to incur indebtedness, will be, for the foreseeable future, sufficient to meet operating requirements and fund capital expenditure programs.

 Growth Strategy:  Our growth strategy for the waste management services segment will focus on increasing revenue, gaining market share and enhancing shareholder value through internal growth. Although we are a waste management services company, we do not own any landfills or provide waste collection services. However, because of our many relationships with various disposal facilities and transporters, we are able to be more flexible and provide alternative solutions to a customer’s waste disposal or recycling needs. We intend to capitalize on our management and sales staff which has extensive experience in all aspects of the waste business. As such, we intend to manage our internal growth as follows:

 •    Sales and Marketing Activities.  We will focus on retaining existing customers and obtaining new business through our well-managed sales and marketing activities.  We seek to manage our sales and marketing activities to enable us to capitalize on our position in many of the markets in which we operate. We provide a tailored program to all of our customers in response to their particular needs. We accomplish this by centralizing services to effectively manage their needs, such as minimizing their procurement costs.

We currently have a number of professional sales and marketing employees in the field who are compensated using a commission structure that is focused on generating high levels of quality revenue. For the most part, these employees directly solicit business from existing and prospective customers. We emphasize our rate and cost structures when we train new and existing sales personnel. We intend to hire additional qualified professional sales personnel to expand into different geographical areas.

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•    Pricing Activities.  We seek to secure price increases necessary to offset increased costs, and when possible, to increase prices to improve our operating margins.
 

•    Long-Term Agreements.  We seek to obtain long-term agreements with all of our customers. By obtaining such long-term agreements, we will have the opportunity to grow our revenue base at the same rate as the underlying revenue growth of these customers.  We believe this positions us to minimize revenue deterioration and experience internal growth rates that are generally higher than our industry’s overall growth rate.   Additionally, we believe that by securing a base of long-term recurring revenue, we are better able to protect our market position from competition and our business may be less susceptible to downturns in economic conditions.

•    Development Activities.  We will seek to identify opportunities to further position us as an integrated service provider in markets where we provide services.  In addition, we will continue to utilize the extensive experience of our management and sales staff to bid on significant one-time projects and those that require special expertise. Where appropriate, we may seek to obtain permits that would provide vertically integrated waste services or expand the service offerings or leverage our existing volumes with current vendors to provide for long term, cost competitive strategic positioning within our existing markets.

 Due to the increase of oil and gas drilling in the Marcellus Shale and Utica Shale regions located in northeast Ohio and western Pennsylvania, Avalon is continuing to explore and research the possibility of drilling deep waste water disposal wells for the disposal of the brine waters from such drilling. Avalon has purchased options on a number of properties for this purpose.
 

For the golf and related operations, several private country clubs in the northeast Ohio area are experiencing economic difficulties. Avalon believes some of these clubs may represent an attractive investment opportunity. While Avalon has not entered into any pending agreements for acquisitions, it may do so at any time and will continue to consider acquisitions that make economic sense.  Such potential acquisitions could be financed by existing working capital, utilizing its line of credit, secured or unsecured debt, issuance of common stock, or issuance of a security with characteristics of both debt and equity, any of which could impact liquidity in the future.

Results of Operations
 

Overall performance

Net operating revenues in the second quarter of 2012 increased to $12.6 million from $11.4 million in the prior year’s second quarter.  The increase is primarily the result of an increase in the net operating revenues of both the waste management services segment and the golf and related operations segment. Costs of operations increased to $10.2 million in the second quarter of 2012 compared with $9.4 million in the prior year’s second quarter.  The increase is primarily due to the increase in net operating revenues of the waste management services segment, which resulted in additional transportation and disposal costs, as these costs vary directly with the associated net operating revenues and to a lesser extent, increased costs of the golf and related operations segment also as a result of higher net operating revenues. Fixed costs relating to depreciation and amortization expense were $.4 million in both the second quarter of 2012 and 2011. Consolidated selling, general and administrative expenses increased to $1.8 million in the second quarter of 2012 compared with $1.7 million in the second quarter of 2011 primarily due to an increase in sales and management bonus incentives of the waste management services segment.  Avalon recorded net income of $.3 million, or $.07 per share, in the second quarter of 2012 compared with net income of $.1 million or $.02 per share, in the second quarter of 2011.  Net income in the second quarter of 2011 was favorably impacted by the sale of an asset in which Avalon recognized a gain of $.1 million.

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For the first six months of 2012, net operating revenues increased to $23.5 million from $21.3 million for the first six months of 2011. The increase is primarily the result of an increase in the net operating revenues of both the waste management services segment and to a lesser extent, the golf and related operations segment. Costs of operations were $19.2 million for the first six months of 2012 compared with $17.6 million for the first six months of 2011. The increase is primarily due to the increase in net operating revenues of the waste management services segment, which resulted in additional transportation and disposal costs as these costs vary directly with the associated net operating revenues and to a lesser extent, increased costs of the golf and related operations segment also as a result of higher net operating revenues. Fixed costs relating to depreciation and amortization expense were $.8 million for both the first six months of 2012 and 2011. Consolidated selling, general and administrative expenses increased to $3.7 million for the first six months of 2012 compared with $3.3 million for the first six months of 2011 primarily due to increased compensation costs relating to stock options and higher incentive bonuses of the waste brokerage and management business. Avalon incurred a net loss of $.1 million, or $.03 per share, for the first six months of 2012 compared with a net loss of $.3 million, or $.07 per share, for the first six months of 2011. Net income for the first six months of 2011 was favorably impacted by the sale of an asset in which Avalon recognized a gain of $.1 million.

Performance in the Second Quarter of 2012 compared with the Second Quarter of 2011

Segment performance

Segment performance should be read in conjunction with Note 7 to the Condensed Consolidated Financial Statements.

Net operating revenues of the waste management services segment increased approximately 8% to $9.1 million in the second quarter of 2012 compared with $8.4 million in the second quarter of the prior year. For the second quarter of 2012, net operating revenues of the waste brokerage and management services business were $8.5 million compared with $7.7 million in the second quarter of 2011, while the net operating revenues of the captive landfill management operations were $.6 million in the second quarter of 2012 compared with $.7 million in the second quarter of 2011. The increase in the net operating revenues of the waste brokerage and management services business was primarily due to an increase of 15% in event or one-time projects, and an 8% increase in continuous work. Event work is defined as bid projects under contract that occurs on a one-time basis over a short period of time and can fluctuate significantly from quarter to quarter. The net operating revenues of the captive landfill operations decreased due to lower volumes of waste generated by the owner of the landfill for whom Avalon manages the facility.

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 Due to the increase in net operating revenues, income before taxes for the waste management services segment increased to $.8 million in the second quarter of 2012 compared with $.7 million in the second quarter of the prior year. Income before taxes of the waste brokerage and management services business was $.7 million for the second quarter of 2012 compared with $.5 million for the second quarter of 2011. The increase was primarily the result of higher net operating revenues and an increase in the overall average gross margin percentage in the second quarter of 2012 compared with the second quarter of 2011. The overall average gross margin percentage in the second quarter of 2012 was 20.5% compared with 19.5% in the prior year quarter. Income before taxes of the captive landfill operations was $.1 million in the second quarter of 2012 compared with $.2 million in the prior year quarter. The decrease was primarily due to the lower volumes of waste generated by the owner of the landfill.
 

Avalon’s golf and related operations segment consists primarily of golf courses, clubhouses which provide dining and banquet facilities, and a travel agency.  Although the golf courses will continue to be available for use by the general public, the primary source of revenues for golf will be generated by the members of the Avalon Golf and Country Club. The average number of members during the second quarter of 2012 increased to 3,378 compared with 2,962 in the prior year’s second quarter. Net operating revenues for the golf and related operations were $3.5 million in the second quarter of 2012 compared with $3.0 million in the second quarter of the prior year. The higher net operating revenues were primarily attributed to the increase in the number of members, which resulted in an increase in the net operating revenues from greens fees, cart rentals, membership dues, food and beverage sales and merchandise sales. Hot and dry weather conditions also contributed to increased golf revenues and use of the club facilities by the members. Income before taxes of the golf and related operations segment was $.1 million in the second quarter of 2012 compared with a loss before taxes of $.1 million in the second quarter of 2011. The increase was primarily due to the higher net operating revenues.

Interest income

Interest income was $1,000 in both the second quarter of 2012 and the second quarter of 2011.

Other income, net

Other income, net was $70,000 in the second quarter of 2012 compared with $177,000 in the second quarter of 2011. In 2011, Avalon recognized a gain of $106,000 the sale of an asset.

General corporate expenses

General corporate expenses were $.6 million in both the second quarter of 2012 and 2011.

Net income

Avalon recorded net income of $.3 million in the second quarter of 2012 compared with net income of $.1 million in the second quarter of 2011. Avalon recorded a state income tax provision in both the second quarter of 2012 and 2011, which was related entirely to the waste management and brokerage operations. Excluding the effect of this state tax provision, Avalon’s overall effective tax rate was 0% in the second quarter of 2012 and 2011. The income tax provision recorded for the second quarter of 2012 and 2011 was offset by a change in the valuation allowance. The overall effective tax rate is different than statutory rates primarily due to a change in the valuation allowance. A valuation allowance is provided when it is more likely than not that deferred tax assets relating to certain federal and state loss carryforwards will not be realized. Avalon continues to maintain a valuation allowance against the majority of its deferred tax amounts until it is evident that the deferred tax asset will be utilized in the future.

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Performance in the first six months of 2012 compared with the first six months of 2011

Segment performance

Segment performance should be read in conjunction with Note 7 to the Condensed Consolidated Financial Statements.

Net operating revenues of the waste management services segment increased to $18.1 million in the first six months of 2012 compared with $16.6 million in the first six months of the prior year. For the first six months of 2012, net operating revenues of the waste brokerage and management services business were $16.8 million compared with $15.3 million for the first six months of 2011, while the net operating revenues of the captive landfill management operations were $1.3 million for both the first six months of 2012 and 2011. The increase in net operating revenues of the waste brokerage and management services business was primarily the result of a 15% increase in event or one-time work and a 6% increase in continuous or on going work. The increase in event work was primarily due to an increase in the number of one-time projects in the first six months of 2012 compared with the same period in 2011. The net operating revenues of the captive landfill operations were flat and are entirely dependent upon the amount of waste generated by the owner of the landfill for whom Avalon manages the facility.

Income from operations before taxes for the waste management services segment increased to $1.5 million in the first six months of 2012 compared with $1.4 million in the first six months of the prior year.  The increase is primarily due to the increase in net operating revenues of the waste brokerage and management services business.  Income before taxes of the waste brokerage and management services business was $1.3 million for the first six months of 2012 compared with $1.1 million for the first six months of 2011. The increase was primarily due to the higher net operating revenues and a slight improvement in the overall average gross margin percentage in the first six months of 2012 compared with the first six months of 2011. Income before taxes of the captive landfill operations was $.2 million in the first six months of 2012 compared with $.3 million in the first six months of 2011. The decrease was primarily due to a decline in the volume of waste generated by the owner of the landfill facility in the second quarter of 2012 and an increase in operating expenses in the first quarter of 2012 as a result of wet weather conditions. Such conditions required additional equipment and man hours to handle the waste.

Avalon’s golf and related operations segment consists primarily of golf courses, clubhouses which provide dining and banquet facilities, and a travel agency.  Although the golf courses will continue to be available for use by the general public, the primary source of revenues for golf will be generated by the members of the Avalon Golf and Country Club. The average number of members during the first six months of 2012 increased to 3,298 compared with 2,916 in the prior year’s first six months. Net operating revenues of the golf and related operations segment were $5.5 million in the first six months of 2012 compared with $4.7 million in the first six months of 2011.  Due to adverse weather conditions, net operating revenues relating to the golf courses, which are located in northeast Ohio and western Pennsylvania, were minimal during the first three months of 2012 and 2011. The higher net operating revenues were primarily attributed to the increase in the number of members, which resulted in an increase in the net operating revenues from greens fees, cart rentals, membership dues, food and beverage sales and merchandise sales. Hot and dry weather conditions during the second quarter of 2012 also contributed to increased golf revenues and use of the club facilities by the members. The golf and related operations segment incurred a loss before taxes of $.3 million for the six months ended June 30, 2012 compared with a loss before taxes of $.5 million for the six months ended June 30, 2011. The improvement was primarily due to the higher net operating revenues.

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Interest income

Interest income was $2,000 in the first six months of 2012 compared with $3,000 in the first six months of 2011.  The decrease is primarily due to lower average investment rates.

Other income, net

Other income, net was $145,000 in the first six months of 2012 compared with $243,000 in the first six months of 2011. In 2011, other income included the sale of an asset in which Avalon recognized a gain of $106,000.

General corporate expenses

General corporate expenses were $1.4 million in the first six months of 2012 compared with $1.2 million in the first six months of 2011. The increase is primarily due to increased compensation costs, which were $.2 million for the first six months of 2012 compared with $.1million for the first six months of 2011 and higher employee related costs.  The increase in compensation costs was due to the Avalon Holdings Corporation common stock price reaching certain predetermined vesting prices in the first quarter of 2012. As such, certain vested stock options became exercisable and the remaining compensation expense relating to those exercisable options was recognized in the first quarter of 2012.

Net income

Avalon incurred a net loss of $.1 million in the first six months of 2012 compared with a net loss of $.3 million in the first six months of the prior year.  Avalon recorded a state income tax provision in the first six months of 2012 and 2011, which was related entirely to the waste management and brokerage operations. Excluding the effect of this state tax provision, Avalon’s overall effective tax rate was 0% in both the first six months of 2012 and 2011.  The income tax benefit for the first six months of 2012 and 2011 was offset by a change in the valuation allowance.  A valuation allowance is provided when it is more likely than not that deferred tax assets relating to certain federal and state loss carryforwards will not be realized.  The overall effective tax rate differs from statutory rates primarily due to the change in the valuation allowance.

Trends and Uncertainties

In the ordinary course of conducting its business, Avalon becomes involved in lawsuits, administrative proceedings and governmental investigations, including those relating to environmental matters.  Some of these proceedings may result in fines, penalties or judgments being assessed against Avalon which, from time to time, may have an impact on its business and financial condition.  Although the outcome of such lawsuits or other proceedings cannot be predicted with certainty, management assesses the probability of loss and accrues a liability as appropriate.  Avalon does not believe that any uninsured ultimate liabilities, fines or penalties resulting from such pending proceedings, individually or in the aggregate, will have a material adverse effect on its liquidity, financial position or results of operations.

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The federal government and numerous state and local governmental bodies are continuing to consider legislation or regulations to either restrict or impede the disposal and/or transportation of waste.  A portion of Avalon’s waste brokerage and management services revenues is derived from the disposal and/or transportation of out-of-state waste.  Any law or regulation restricting or impeding the transportation of waste or the acceptance of out-of-state waste for disposal could have a negative effect on Avalon.

Avalon’s waste brokerage and management services business obtains and retains customers by providing services and identifying cost-efficient disposal options unique to a customer’s needs.  Consolidation within the solid waste industry has resulted in reducing the number of disposal options available to waste generators and may cause disposal pricing to increase.  Avalon’s waste brokerage and management services business may not be able to pass these price increases onto some of its customers, which, in turn, may adversely impact Avalon’s future financial performance.

A significant portion of Avalon’s business is generated from waste brokerage and management services provided to customers and is not subject to long-term contracts.  In light of current economic, regulatory and competitive conditions, there can be no assurance that Avalon’s current customers will continue to transact business with Avalon at historical levels.  Failure by Avalon to retain its current customers or to replace lost business could adversely impact the future financial performance of Avalon.

Avalon’s captive landfill management business is dependent upon a single customer as its sole source of revenue. If the captive landfill management business is unable to retain this customer, Avalon’s future financial performance could be adversely impacted.

Economic challenges throughout the industries served by Avalon have resulted in payment defaults by customers.  While Avalon continuously endeavors to limit customer credit risks, customer-specific financial downturns are not controllable by management.  Significant customer payment defaults would have a material adverse impact upon Avalon’s future financial performance.

The Avalon Golf and Country Club has golf courses and clubhouses at each of its three facilities. The Squaw Creek and Sharon facilities each have a swimming pool, a fitness center and dining and banquet facilities.  The Squaw Creek facility also has tennis courts. The Avalon Golf and Country Club competes with many public courses and country clubs in the area.  Although the golf courses continue to be available for use by the general public, the primary source of revenues will be generated by the members of the Avalon Golf and Country Club.  Avalon believes that the combination of these three facilities will result in additional memberships in the Avalon Golf and Country Club. Due to the state of the economy, the ability to retain current members and attract new members has been difficult.  Although Avalon has been able to retain and increase the number of members of the Avalon Golf and Country Club, as of June 30, 2012, Avalon has not attained its membership goals.  There can be no assurance as to when such goals will be attained and when the golf and related operations will ultimately become profitable.  Avalon is continually using different marketing strategies to attract new members, such as local television advertising and various membership promotions. A significant decline in members could adversely affect the future financial performance of Avalon.

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All three of Avalon’s golf course operations currently hold liquor licenses for their respective facilities.  If, for some reason, any one of these facilities were to lose its liquor license, the financial performance of the golf and related operations would be adversely affected.

Avalon’s operations are somewhat seasonal in nature since a significant portion of those operations are primarily conducted in selected northeastern and midwestern states.  Additionally, Avalon’s golf courses are located in northeast Ohio and western Pennsylvania and are significantly dependent upon weather conditions during the golf season. As a result, Avalon’s financial performance is adversely affected by adverse weather conditions.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Avalon does not have significant exposure to changing interest rates.  A 10% change in interest rates would have an immaterial effect on Avalon’s income before taxes for the next fiscal year.  Avalon currently has no debt outstanding and invests primarily in Certificates of Deposit, U.S. Treasury notes, short-term money market funds and other short-term obligations.  Avalon does not undertake any specific actions to cover its exposure to interest rate risk and Avalon is not a party to any interest rate risk management transactions. Avalon does not purchase or hold any derivative financial instruments.

Item 4. Controls and Procedures

As required by Rule 13a-15 under the Securities Exchange Act of 1934 (the “Exchange Act”), Avalon’s management conducted an evaluation, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2012. For purposes of the foregoing, the term disclosure controls and procedures means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s (“SEC”) rules and forms.  Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Avalon’s disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives as outlined above.  Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that they believe that, as of June 30, 2012 our disclosure controls and procedures were effective at a reasonable assurance level.

Changes in Internal Controls over Financial Reporting. There were no changes in our internal controls over financial reporting during the fiscal quarter ended June 30, 2012 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

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PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

Reference is made to “Item 3. Legal Proceedings” in Avalon’s Annual Report on Form 10-K for the year ended December 31, 2011 for a description of legal proceedings.

Item 2.  Changes in Securities and Use of Proceeds

None

Item 3.  Defaults upon Senior Securities

None

Item 4.  Mine Safety Disclosures

None

Item 5.  Other Information

None

Item 6.  Exhibits and Reports on Form 8-K

(a) Exhibits

Exhibit 31.1  Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 31.2  Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.1  Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.2  Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit 101.INS* XBRL Instance

Exhibit 101.SCH* XBRL Taxonomy Extension Schema

Exhibit 101.CAL* XBRL Taxonomy Extension Calculation

Exhibit 101.DEF* XBRL Taxonomy Extension Definition

Exhibit 101.LAB* XBRL Taxonomy Extension Labels

Exhibit 101.PRE* XBRL Taxonomy Extension Presentation

* XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

(b) Reports on Form 8-K

On April 27, 2012, reported the voting results from the Annual Meeting held on April 26, 2012.

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SIGNATURE

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

		AVALON HOLDINGS CORPORATION
		(Registrant)
Date:	August 9, 2012	By:	/s/ Timothy C. Coxson
		Timothy C. Coxson, Chief Financial Officer and
		Treasurer (Principal Financial and Accounting
		Officer and Duly Authorized Officer)

23

EX-31.1

AVALON HOLDINGS CORPORATION   Exhibit 31.1

CERTIFICATION PURSUANT TO

SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

CERTIFICATION

I, Ronald E. Klingle, certify that:

1.  I have reviewed this quarterly report on Form 10-Q of Avalon Holdings Corporation;

2.  Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.  The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e )and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.  The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date: August 9, 2012

/s/ Ronald E. Klingle

Ronald E. Klingle

Chief Executive Officer

EX-31.2

AVALON HOLDINGS CORPORATION   Exhibit 31.2

CERTIFICATION PURSUANT TO

SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

CERTIFICATION

I, Timothy C. Coxson, certify that:

1.  I have reviewed this quarterly report on Form 10-Q of Avalon Holdings Corporation;

2.  Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.  The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.  The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date: August 9, 2012

/s/ Timothy C. Coxson

Timothy C. Coxson

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Avalon Holdings Corporation on Form 10-Q for the period ending June 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ronald E. Klingle, Chief Executive Officer of Avalon Holdings Corporation, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Avalon Holdings Corporation.

/s/ Ronald E. Klingle

Ronald E. Klingle

Chief Executive Officer

August 9, 2012

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Avalon Holdings Corporation on Form 10-Q for the period ending June 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Timothy C. Coxson, Chief Financial Officer of Avalon Holdings Corporation, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Avalon Holdings Corporation.

/s/ Timothy C. Coxson

Timothy C. Coxson

Chief Financial Officer

August 9, 2012

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Note 4. Income Taxes

6 Months Ended

Jun. 30, 2012

Income Tax Disclosure [Text Block]

Note 4. Income Taxes

Avalon recorded net income of $274,000 in the second quarter of 2012 compared with net income of $77,000 in the second quarter of 2011. Avalon recorded a state income tax provision in both the second quarter of 2012 and 2011, which was related entirely to the waste management and brokerage operations. Excluding the effect of this state tax provision, Avalon’s overall effective tax rate was 0% in the second quarter of 2012 and 2011. The income tax provision recorded for the second quarter of 2012 and 2011 was offset by a change in the valuation allowance. The overall effective tax rate is different than statutory rates primarily due to a change in the valuation allowance. A valuation allowance is provided when it is more likely than not that deferred tax assets relating to certain federal and state loss carryforwards will not be realized. Avalon continues to maintain a valuation allowance against the majority of its deferred tax amounts until it is evident that the deferred tax asset will be utilized in the future.

Avalon incurred a net loss of $.1 million for the first six months of 2012 compared with net loss of $.3 million for the first six months of 2011. Excluding the effect of the state income tax provisions relating to the waste management and brokerage operations, Avalon’s overall effective tax rate was 0% in the first six months of 2012 and 2011. The income tax benefits recorded for the first six months of 2012 and 2011 were offset by a change in the valuation allowance. The overall effective tax rate is different than statutory rates primarily due to a change in the valuation allowance. A valuation allowance is provided when it is more likely than not that deferred tax assets relating to certain federal and state loss carryforwards will not be realized. Avalon continues to maintain a valuation allowance against the majority of its deferred tax amounts until it is evident that the deferred tax asset will be utilized in the future.

XML

Note 3. Credit Facility

6 Months Ended

Jun. 30, 2012

Debt Disclosure [Text Block]

Note 3. Credit Facility

On March 21, 2008, Avalon entered into a $3.5 million unsecured line of credit agreement with The Huntington National Bank. Avalon has never borrowed monies under the line of credit. On April 26, 2011 the line of credit was reduced to $1 million. Interest on borrowings accrues at LIBOR plus 1.75%. The agreement provides for a minimum interest rate of 3.25%.  The line of credit is renewed annually and contains certain financial and other covenants, customary representations, warranties and events of defaults. At June 30, 2012 and December 31, 2011, there were no borrowings under the line of credit.

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Condensed Consolidated Statements of Operations (Unaudited) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Net operating revenues	$ 12,609,000	$ 11,375,000	$ 23,547,000	$ 21,269,000
Costs of operations	10,195,000	9,354,000	19,231,000	17,589,000
Depreciation and amortization	407,000	416,000	820,000	835,000
Selling, general and administrative expenses	1,781,000	1,691,000	3,719,000	3,323,000
Operating income (loss)	226,000	(86,000)	(223,000)	(478,000)
Interest expense	(4,000)	(4,000)	(7,000)	(7,000)
Interest income	1,000	1,000	2,000	3,000
Other income, net	70,000	177,000	145,000	243,000
Income (loss) before income taxes	293,000	88,000	(83,000)	(239,000)
Provision for income taxes	19,000	11,000	36,000	24,000
Net income (loss)	$ 274,000	$ 77,000	$ (119,000)	$ (263,000)
Net Income (loss) per share – basic (in Dollars per share)	$ 0.07	$ 0.02	$ (0.03)	$ (0.07)
Net Income (loss) per share – diluted (in Dollars per share)	$ 0.07	$ 0.02	$ (0.03)	$ (0.07)
Weighted average shares outstanding – basic (in Shares)	3,803,000	3,803,000	3,803,331	3,803,000
Weighted average shares outstanding – diluted (in Shares)	4,107,945	3,868,557
With Effect of Antidilutive Securities [Member]
Weighted average shares outstanding – diluted (in Shares)	4,108,000	3,869,000	3,803,000	3,803,000

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Note 1. Basis of Presentation

6 Months Ended

Jun. 30, 2012

Significant Accounting Policies [Text Block]

Note 1.  Basis of Presentation

The unaudited condensed consolidated financial statements of Avalon Holdings Corporation and subsidiaries (collectively “Avalon”) and related notes included herein have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission.  Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted consistent with such rules and regulations.  The accompanying unaudited condensed consolidated financial statements and related notes should be read in conjunction with the consolidated financial statements and related notes included in Avalon’s 2011 Annual Report to Shareholders.

In the opinion of management, these unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the financial position of Avalon as of June 30, 2012, and the results of its operations and cash flows for the interim periods presented.

The operating results for the interim periods are not necessarily indicative of the results to be expected for the full year.

Avalon evaluated subsequent events through the date the financial statements were issued.

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Note 7. Business Segment Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended			6 Months Ended		3 Months Ended	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011	Jun. 30, 2011 One Customer [Member] Consolidated Net Operating Revenues [Member]	Jun. 30, 2012 Waste Management Services [Member]	Dec. 31, 2011 Waste Brokerage and Management Services [Member]	Jun. 30, 2012 Waste Brokerage and Management Services [Member]	Jun. 30, 2012 Golf and Related Operations [Member]	Jun. 30, 2012 Consolidated Net Operating Revenues [Member]	Jun. 30, 2011 Waste Management Services Segments Net Operating Revenues [Member]
Deferred Revenue, Current	$ 2,862		$ 2,862		$ 2,105
Concentration Risk, Percentage						11.00%					0.00%	14.00%
Increase (Decrease) in Accounts Receivable			3,154	348			(3,200)			1,400
Revenues	$ 12,609	$ 11,375	$ 23,547	$ 21,269				$ 13,900	$ 8,500

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Note 7. Business Segment Information (Detail) - Segment Reporting Information - Identifiable Assets (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Identifiable assets:
Identifiable assets	$ 50,324	$ 53,367
Waste Management Services [Member]
Identifiable assets:
Identifiable assets	13,709	16,869
Golf and Related Operations [Member]
Identifiable assets:
Identifiable assets	31,508	30,140
Corporate [Member]
Identifiable assets:
Identifiable assets	40,941	41,840
Subtotal [Member]
Identifiable assets:
Identifiable assets	86,158	88,849
Intersegment Elimination [Member]
Identifiable assets:
Identifiable assets	$ (35,834)	$ (35,482)

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Note 2. Net Income (Loss) per Share

6 Months Ended

Jun. 30, 2012

Earnings Per Share [Text Block]

Note 2.  Net Income (Loss) per Share

Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the periods presented, which was 3,803,331 for each period.

Diluted net income (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding plus any weighted common equivalent shares determined to be outstanding during the period using the treasury method. The weighted common equivalent shares included in the calculation are related to the stock options granted by Avalon where the weighted average market price of Avalon’s common stock for the period presented is greater than the option exercise price of the stock option. For the three months ended June 30, 2012 and 2011, the dilutive weighted average number of shares outstanding was 4,107,945 and 3,868,557, respectively. Although there were common equivalent shares outstanding for the six months ended June 30, 2012 and 2011, the diluted per share amounts reported are equal to basic per share amounts because Avalon was in a net loss position and as a result, such dilution would be considered anti-dilutive. Assuming dilution, the weighted average number of common shares outstanding for the six months ended June 30, 2012 and 2011 were 4,070,087, and 3,885,157, respectively.

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Current Assets:
Cash and cash equivalents	$ 6,961	$ 7,324
Accounts receivable, net	9,712	12,885
Prepaid expenses	293	281
Refundable income taxes	2	2
Other current assets	910	717
Total current assets	17,878	21,209
Property and equipment, less accumulated depreciation and amortization of $11,934 in 2012 and $11,321 in 2011	25,630	26,079
Leased property under capital leases, less accumulated depreciation and amortization of $2,725 in 2012 and $2,539 in 2011	6,700	5,984
Noncurrent deferred tax asset	8	8
Other assets, net	108	87
Total assets	50,324	53,367
Current Liabilities:
Current portion of obligations under capital leases	1	1
Accounts payable	5,927	9,643
Accrued payroll and other compensation	615	755
Accrued income taxes	7	20
Other accrued taxes	168	260
Deferred revenues	2,862	2,105
Other liabilities and accrued expenses	506	406
Total current liabilities	10,086	13,190
Obligations under capital leases	227	227
Shareholders’ Equity:
Paid-in capital	58,593	58,413
Accumulated deficit	(18,620)	(18,501)
Total shareholders’ equity	40,011	39,950
Total liabilities and shareholders’ equity	50,324	53,367
Common Class A [Member]
Shareholders’ Equity:
Common Stock	32	32
Common Class B [Member]
Shareholders’ Equity:
Common Stock	$ 6	$ 6

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Note 3. Credit Facility (Detail) (USD $)	1 Months Ended
	Apr. 26, 2011	Jun. 30, 2012	Dec. 31, 2011	Mar. 21, 2008
Line of Credit Facility, Maximum Borrowing Capacity	$ 1,000,000			$ 3,500,000
Debt Instrument, Basis Spread on Variable Rate	1.75%
Debt Instrument, Interest Rate, Stated Percentage Rate Range, Maximum	3.25%
Line of Credit Facility, Amount Outstanding		$ 0	$ 0

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Document And Entity Information	6 Months Ended
	Jun. 30, 2012	Aug. 08, 2012 Common Class A [Member]	Aug. 08, 2012 Common Class B [Member]
Entity Registrant Name	AVALON HOLDINGS CORP
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		3,191,038	612,293
Amendment Flag	false
Entity Central Index Key	0001061069
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Document Period End Date	Jun. 30, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2

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Note 4. Income Taxes (Detail) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Net Income (Loss) Attributable to Parent (in Dollars)	$ 274,000	$ 77,000	$ (119,000)	$ (263,000)
Effective Income Tax Rate, Continuing Operations	0.00%	0.00%	0.00%	0.00%

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Condensed Consolidated Balance Sheets (Parentheticals) (USD $) In Thousands, except Per Share data, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Accumulated Depreciation and Amortization (in Dollars)	$ 11,934	$ 11,321
Leased Property Accumulated Depreciation and Amortization (in Dollars)	$ 2,725	$ 2,539
Class A Par Value [Member]
Par Value	$ 0.01	$ 0.01
Class B Par Value [Member]
Par Value	$ 0.01	$ 0.01

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Note 7. Business Segment Information

6 Months Ended

Jun. 30, 2012

Segment Reporting Disclosure [Text Block]

Note 7.  Business Segment Information

Avalon’s reportable segments include waste management services and golf and related operations. In determining the segment information, Avalon considered its operating and management structure and the types of information subject to regular review by its “chief operating decision maker.”  On this basis, Avalon’s reportable segments include waste management services and golf and related operations.  Avalon accounts for intersegment net operating revenues as if the transactions were to third parties.  The segment disclosures are presented on this basis for all years presented.

Avalon’s primary business segment, the waste management services segment, provides hazardous and nonhazardous waste disposal brokerage and management services to industrial, commercial, municipal and governmental customers, manages a captive landfill for an industrial customer and sells construction mats.  The golf and related operations segment includes the operations of golf courses, clubhouses that provide recreational, dining and banquet facilities and a travel agency.  Revenue for the golf and related operations segment consists primarily of membership dues, green fees, cart rentals, merchandise, and food and beverage sales.  Revenue related to membership dues are recognized proportionately over twelve months.  The unrecognized or deferred revenues relating to membership dues at June 30, 2012 and December 31, 2011 were $2.9 million and $2.1 million, respectively. Avalon does not have significant operations located outside the United States and, accordingly, geographical segment information is not presented.

For the six months ended June 30, 2012 no customer accounted for 10% or more of Avalon’s consolidated net operating revenues. For the six months ended June 30, 2011 one customer accounted for 14% of the waste management services segment’s net operating revenues to external customers and 11% of Avalon’s consolidated net operating revenues.  In addition, Avalon’s captive landfill management business is dependent upon a single customer as its sole source of revenue.

The accounting policies of the segments are consistent with those described for the consolidated financial statements in the summary of significant accounting policies.  Avalon measures segment profit for internal reporting purposes as income (loss) before taxes.  Business segment information including the reconciliation of segment income before taxes to income (loss) before taxes is as follows (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Net operating revenues from:
Waste management services:
External customers revenues	$	9,114		$	8,402		$	18,052		$	16,609
Intersegment revenues		1			—			1			—
Total waste management services		9,115			8,402			18,053			16,609
Golf and related operations:
External customers revenues		3,495			2,973			5,495			4,660
Intersegment revenues		28			25			38			33
Total golf and related operations		3,523			2,998			5,533			4,693
Segment operating revenues		12,638			11,400			23,586			21,302
Intersegment eliminations		(29	)		(25	)		(39	)		(33	)
Total net operating revenues	$	12,609		$	11,375		$	23,547		$	21,269
Income (loss) before taxes:
Waste management services	$	800		$	690		$	1,523		$	1,374
Golf and related operations		91			(114	)		(262	)		(508	)
Segment income before taxes		891			576			1,261			866
Corporate interest income		1			1			2			3
Corporate other income, net		8			115			17			124
General corporate expenses		(607	)		(604	)		(1,363	)		(1,232	)
Income (loss) before taxes	$	293		$	88		$	(83	)	$	(239	)
Interest income:
Waste management services	$	—		$	—		$	—		$	—
Golf and related operations		—			—			—			—
Corporate		1			1			2			3
Total	$	1		$	1		$	2		$	3

	June 30, 2012			December 31, 2011
Identifiable assets:
Waste management services	$	13,709		$	16,869
Golf and related operations		31,508			30,140
Corporate		40,941			41,840
Subtotal		86,158			88,849
Elimination of intersegment receivables		(35,834	)		(35,482	)
Total	$	50,324		$	53,367

In comparing the identifiable assets at June 30, 2012 with those at December 31, 2011, the decrease in identifiable assets of the waste management services segment of $3.2 million is primarily due to a decrease in accounts receivable as a result of lower net operating revenues of the waste brokerage and management services business in the second quarter of 2012 compared with the fourth quarter of 2011. Net operating revenues of the waste brokerage and management services business were $8.5 million in the second quarter of 2012 compared with $13.9 million in the fourth quarter of 2011. The increase in identifiable assets of the golf and related operations segment of $1.4 million is primarily due to capital expenditures made during the first six months of 2012 and an increase in accounts receivable at June 30, 2012 compared with December 31, 2011.
 

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Note 6. Legal Matters

6 Months Ended

Jun. 30, 2012

Legal Matters and Contingencies [Text Block]

Note 6. Legal Matters

In the ordinary course of conducting its business, Avalon becomes involved in lawsuits, administrative proceedings and governmental investigations, including those related to environmental matters.  Some of these proceedings may result in fines, penalties or judgments being assessed against Avalon which, from time to time, may have an impact on its business and financial condition.  Although the outcome of such lawsuits or other proceedings cannot be predicted with certainty, Avalon does not believe that any uninsured ultimate liabilities, fines or penalties resulting from such pending proceedings, individually or in the aggregate, will have a material adverse effect on its liquidity, financial position or results of operations.

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Note 7. Business Segment Information (Detail) - Segment Reporting Information - Income (Loss) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Segment operating revenues	$ 12,638	$ 11,400	$ 23,586	$ 21,302
Intersegment eliminations	(29)	(25)	(39)	(33)
Total net operating revenues	12,609	11,375	23,547	21,269
Income before taxes	293	88	(83)	(239)
Interest income	1	1	2	3
Corporate other income, net	70	177	145	243
General corporate expenses	(607)	(604)	(1,363)	(1,232)
Waste Management Services [Member]
External customers revenues	9,114	8,402	18,052	16,609
Intersegment revenues	1		1
Segment operating revenues	9,115	8,402	18,053	16,609
Income before taxes	800	690	1,523	1,374
Golf and Related Operations [Member]
External customers revenues	3,495	2,973	5,495	4,660
Intersegment revenues	28	25	38	33
Segment operating revenues	3,523	2,998	5,533	4,693
Income before taxes	91	(114)	(262)	(508)
Operating Segments [Member]
Income before taxes	891	576	1,261	866
Corporate [Member]
Interest income	1	1	2	3
Corporate other income, net	$ 8	$ 115	$ 17	$ 124

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Note 5. Long-term Incentive Plan (Detail) (USD $)	1 Months Ended		3 Months Ended			6 Months Ended
	Mar. 31, 2011	Feb. 28, 2011	Jun. 30, 2012	Jun. 30, 2011	Mar. 31, 2010	Jun. 30, 2012	Jun. 30, 2011
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in Shares)	280,000				980,000	0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period (in Shares)		450,000				0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period (in Shares)	50,000					0
Allocated Share-based Compensation Expense (in Dollars)			$ 27,000	$ 52,000		$ 180,000	$ 93,000
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized (in Dollars)			$ 0.3			$ 0.3
Avalon Holdings Corporation 2009 Long-term Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in Shares)			1,300,000			1,300,000
Block One [Member] | Begins Vesting After Grant Date [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period						12 months
Block One [Member] | Ends Vesting After Grant Date [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period						48 months
Block One [Member]
Predetermined Vesting Price (in Dollars per share)			$ 3.43			$ 3.43
Block Two [Member] | Begins Vesting After Grant Date [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period						24 months
Block Two [Member] | Ends Vesting After Grant Date [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period						60 months
Block Two [Member]
Predetermined Vesting Price (in Dollars per share)			$ 4.69			$ 4.69
Block Three [Member] | Begins Vesting After Grant Date [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period						36 months
Block Three [Member] | Ends Vesting After Grant Date [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period						72 months
Block Three [Member]
Predetermined Vesting Price (in Dollars per share)			$ 6.43			$ 6.43
Block Four [Member] | Begins Vesting After Grant Date [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period						48 months
Block Four [Member] | Ends Vesting After Grant Date [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period						84 months
Block Four [Member]
Predetermined Vesting Price (in Dollars per share)			$ 8.81			$ 8.81
Block Five [Member] | Begins Vesting After Grant Date [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period						60 months
Block Five [Member] | Ends Vesting After Grant Date [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period						96 months
Block Five [Member]
Predetermined Vesting Price (in Dollars per share)			$ 12.07			$ 12.07
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate						60.90%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate						2.06%
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate						61.70%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate						2.28%
Weighted Average [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate						61.20%

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Note 7. Business Segment Information (Tables)

6 Months Ended

Jun. 30, 2012

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	June 30, 2012			December 31, 2011
Identifiable assets:
Waste management services	$	13,709		$	16,869
Golf and related operations		31,508			30,140
Corporate		40,941			41,840
Subtotal		86,158			88,849
Elimination of intersegment receivables		(35,834	)		(35,482	)
Total	$	50,324		$	53,367

Segment Income [Member]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Net operating revenues from:
Waste management services:
External customers revenues	$	9,114		$	8,402		$	18,052		$	16,609
Intersegment revenues		1			—			1			—
Total waste management services		9,115			8,402			18,053			16,609
Golf and related operations:
External customers revenues		3,495			2,973			5,495			4,660
Intersegment revenues		28			25			38			33
Total golf and related operations		3,523			2,998			5,533			4,693
Segment operating revenues		12,638			11,400			23,586			21,302
Intersegment eliminations		(29	)		(25	)		(39	)		(33	)
Total net operating revenues	$	12,609		$	11,375		$	23,547		$	21,269
Income (loss) before taxes:
Waste management services	$	800		$	690		$	1,523		$	1,374
Golf and related operations		91			(114	)		(262	)		(508	)
Segment income before taxes		891			576			1,261			866
Corporate interest income		1			1			2			3
Corporate other income, net		8			115			17			124
General corporate expenses		(607	)		(604	)		(1,363	)		(1,232	)
Income (loss) before taxes	$	293		$	88		$	(83	)	$	(239	)
Interest income:
Waste management services	$	—		$	—		$	—		$	—
Golf and related operations		—			—			—			—
Corporate		1			1			2			3
Total	$	1		$	1		$	2		$	3

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Note 8. Recently Adopted Accounting Pronouncements

3 Months Ended

Mar. 31, 2012

Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block]

Note 8.  Recently Adopted Accounting Pronouncements

Effective January 1, 2012, Avalon adopted the FASB’s ASU No. 2011-05, Presentation of Comprehensive Income (Topic 220). The adoption of this accounting guidance did not have an impact on Avalon’s financial position, results of operations or cash flows. As required by the new standard, the Condensed Consolidated Statement of Comprehensive Income is included in the Condensed Consolidated Financial Statements.

Effective January 1, 2012, Avalon adopted the FASB’s ASU No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in US GAAP and IFRSs, which amends ASC 820, Fair Value Measurement. This ASU requires the categorization by level for items that are required to be disclosed at fair value, information about transfers between Level 1 and Level 2 and additional disclosure for Level 3 measurements. In addition, the ASU provides guidance on measuring the fair value of financial instruments managed within a portfolio and the application of premiums and discounts on fair value measurements. The adoption of this accounting guidance did not have an impact on Avalon’s consolidated financial statements.

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Note 5. Long-term Incentive Plan (Tables)

6 Months Ended

Jun. 30, 2012

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

Options outstanding at January 1, 2012	760,000
Options forfeited	0
Options cancelled	0
2012 Options granted	0
Total options outstanding at June 30, 2012	760,000
Options Vested	248,000
Options Exercisable	248,000

Schedule of Other Share-based Compensation, Activity [Table Text Block]

Number of Options Granted	Weighted Average Exercise Price		Weighted Average Fair Value at Grant Date
760,000	$	2.63	$	1.09

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Note 2. Net Income (Loss) per Share (Detail)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Weighted Average Number of Shares Outstanding, Basic	3,803,000	3,803,000	3,803,331	3,803,000
Weighted Average Number of Shares Outstanding, Diluted	4,107,945	3,868,557
Assuming Dilution Effect [Member]
Weighted Average Number of Shares Outstanding, Diluted			4,070,087	3,885,157

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Note 5. Long-term Incentive Plan (Detail) - Options Outstanding (USD $)	6 Months Ended
	Jun. 30, 2012	Dec. 31, 2011
(in Shares)	760,000	760,000
	$ 2.63
	$ 1.09

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Operating activities:
Net loss	$ (119,000)	$ (263,000)
Reconciliation of loss to cash provided by (used in) operating activities:
Depreciation and amortization	820,000	835,000
Compensation costs – stock options	180,000	93,000
Provision for losses on accounts receivable	19,000	8,000
Gain from disposal of property and equipment	(1,000)	(106,000)
Change in operating assets and liabilities:
Accounts receivable	3,154,000	348,000
Prepaid expenses	(12,000)	97,000
Other current assets	(193,000)	(222,000)
Other assets, net	(21,000)
Accounts payable	(4,097,000)	(317,000)
Accrued payroll and other compensation	(140,000)	302,000
Accrued income taxes	(13,000)	2,000
Other accrued taxes	(92,000)	(55,000)
Deferred revenues	757,000	493,000
Other liabilities and accrued expenses	100,000	54,000
Net cash provided by operating activities	342,000	1,269,000
Investing activities:
Capital expenditures	(708,000)	(1,024,000)
Proceeds from disposal of property and equipment	3,000	355,000
Net cash used in investing activities	(705,000)	(669,000)
(Decrease) increase in cash and cash equivalents	(363,000)	600,000
Cash and cash equivalents at beginning of year	7,324,000	5,565,000
Cash and cash equivalents at end of period	6,961,000	6,165,000
Non-cash investing activities:
Capital expenditures included in Accounts payable	$ 381,000	$ 120,000

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Note 5. Long-term Incentive Plan

6 Months Ended

Jun. 30, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Note 5. Long-term Incentive Plan

The purpose of the Avalon Holdings Corporation 2009 Long-term Incentive Plan (the “Plan”) is (a) to improve individual employee performance by providing long-term incentives and rewards to employees of Avalon, (b) to assist Avalon in attracting, retaining and motivating employees and non-employee directors with experience and ability, and (c) to associate the interests of such employees and directors with those of the Avalon shareholders. Under the Plan, 1,300,000 shares have been reserved for the issuance of stock options. During the first quarter of 2010, 980,000 stock options were granted under the Plan. Of these options granted, 450,000 were forfeited in February 2011 and 50,000 cancelled in March 2011. In March 2011, 280,000 stock options were granted under the Plan. The stock options, vest ratably over a five year period and have a contractual term of ten years from the date of grant. At the end of each contractual vesting period, the share price of the Avalon common stock, traded on a public stock exchange (NYSE Amex), must reach a predetermined price within three years following such contractual vesting period before the stock options are exercisable (See table below). If the Avalon common stock price does not reach the predetermined price, the stock options will either be cancelled or the period will be extended at the discretion of the Board of Directors.

The Monte Carlo Simulation was selected to determine the fair value because it incorporates six minimum considerations;  1) the exercise price of the option, 2) the expected term of the option, taking into account both the contractual term of the option, the effects of employees’ expected exercise and post-vesting employment termination behavior, as well as the possibility of change in control events during the contractual term of the option agreements, 3) the current fair value of the underlying equity, 4) the expected volatility of the value of the underlying share for the expected term of the option, 5) the expected dividends on the underlying share for the expected term of the option and 6) the risk-free interest rate(s) for the expected term of the option.

The expected term, or time until the option is exercised is typically based on historical exercising behavior of previous option holders of a company’s stock. Due to the fact that no options have been exercised as of yet, and therefore no historical exercising behavior available, an alternative method was used. Because of the nature of the vesting as described above, the options were separated into five blocks, with each block having its own vesting period and expected term. Assuming the vesting occurs ratably over the vesting period for each option block, the average vesting term (requisite service period) for each option block was calculated to be 2.54, 3.54, 4.54, 5.54 and 6.54 years for option blocks 1 through 5, respectively. As such, the expected terms were calculated to be 6.27, 6.77, 7.27, 7.77 and 8.27 years, for option blocks 1 through 5, respectively.

The current fair value of the underlying equity was determined to be equal to Avalon’s publicly traded stock price as of the grant dates times the sum of the Class A and Class B common shares outstanding.

The expected volatility was based on the observed volatility of Avalon common stock for a five year period prior to the grant dates. The expected volatility that was used ranged from 60.9% to 61.7% with a weighted average expected volatility of 61.2%.

There were no expected dividends and the risk-free interest rate(s), which ranged from 2.06% to 2.28%, were based on yield data for U. S. Treasury securities over a period consistent with the expected term.

The following information is a summary of the stock option activity:

Options outstanding at January 1, 2012	760,000
Options forfeited	0
Options cancelled	0
2012 Options granted	0
Total options outstanding at June 30, 2012	760,000
Options Vested	248,000
Options Exercisable	248,000

Number of Options Granted	Weighted Average Exercise Price		Weighted Average Fair Value at Grant Date
760,000	$	2.63	$	1.09

The stock options vest and become exercisable based upon achieving two critical metrics as follows:

1) Contract Vesting Term:  The stock options vest ratably over a five year period.

2) The Avalon common stock price traded on a public stock exchange (NYSE Amex) must reach the predetermined vesting price within three years after the options become vested under the Contract Vesting Term.

The table below represents the period and predetermined stock price needed for vesting.

	Begins Vesting (mo. after Grant Dates)		Ends Vesting (mo. after Grant Dates)		Predetermined Vesting Price
Block 1		12		48	$	3.43
Block 2		24		60	$	4.69
Block 3		36		72	$	6.43
Block 4		48		84	$	8.81
Block 5		60		96	$	12.07

Compensation cost was approximately $27,000 and $52,000 for the three months ended June 30, 2012 and 2011, respectively, and $180,000 and $93,000 for the six months ended June 30, 2012 and 2011, respectively, based upon the estimated fair value calculation. The increase in compensation expense for the six months ended June 30, 2012 was due to the fact that during the first quarter of 2012, the predetermined vesting prices of $3.43 and $4.69 for the Avalon common stock were reached for Block 1 and Block 2.  Therefore, any options that had vested in Block 1 and Block 2 became exercisable and the remaining compensation expense relating to those exercisable options was recognized in the first quarter. The deferred tax benefit recorded was offset by an increase to the valuation allowance. As a result of recognizing the compensation expense relating to Block 1 and Block 2 on an accelerated basis, the compensation expense for the second quarter ended June 30, 2012 was substantially lower compared with the prior year second quarter. As of June 30, 2012, there was $.3 million of total unrecognized compensation costs related to non-vested share-based compensation arrangements granted under the Plan. That cost is expected to be recognized over a weighted-average period of 3.49 years.

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Note 5. Long-term Incentive Plan (Detail) - Stock Option Activity	1 Months Ended		3 Months Ended	6 Months Ended
	Mar. 31, 2011	Feb. 28, 2011	Mar. 31, 2010	Jun. 30, 2012
Options outstanding at January 1, 2012				760,000
Options forfeited		450,000		0
Options cancelled	50,000			0
2012 Options granted	280,000		980,000	0
Total options outstanding at June 30, 2012				760,000
Options Vested				248,000
Options Exercisable				248,000