10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

xQUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2013

or

oTRANSITION REPORT PURSUANT TO Section 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                        to                     .

Commission file number: 0000-11688

US ECOLOGY, INC.

(Exact name of registrant as specified in its charter)

Delaware	95-3889638
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
251 E. Front St., Suite 400
Boise, Idaho	83702
(Address of principal executive offices)	(Zip Code)

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

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate 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 x No o

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

Large accelerated filer o	Accelerated filer x
Non-accelerated filer o	Smaller reporting company o
(Do not check if a smaller reporting company)

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

At July 26, 2013, there were 18,530,085 shares of the registrant’s Common Stock outstanding.

US ECOLOGY, INC.

FORM 10-Q

TABLE OF CONTENTS

Item		Page
	PART I — FINANCIAL INFORMATION	3
1.	Financial Statements (Unaudited)	3
	Consolidated Balance Sheets as of June 30, 2013 and December 31, 2012	3
	Consolidated Statements of Operations for the three and six months ended June 30, 2013 and 2012	4
	Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2013 and 2012	5
	Consolidated Statements of Cash Flows for the six months ended June 30, 2013 and 2012	6
	Notes to Consolidated Financial Statements	7
	Report of Independent Registered Public Accounting Firm	16
2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
3.	Quantitative and Qualitative Disclosures About Market Risk	25
4.	Controls and Procedures	26
	PART II — OTHER INFORMATION	27
	Cautionary Statement	27
1.	Legal Proceedings	27
1A.	Risk Factors	27
2.	Unregistered Sales of Equity Securities and Use of Proceeds	27
3.	Defaults Upon Senior Securities	28
4.	Mine Safety Disclosures	28
5.	Other Information	28
6.	Exhibits	28
	SIGNATURE	29

2

PART I - FINANCIAL INFORMATION

ITEM 1.FINANCIAL STATEMENTS

US ECOLOGY, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except par value amount)

	June 30, 2013			December 31, 2012
Assets
Current Assets:
Cash and cash equivalents	$	3,982		$	2,120
Receivables, net	34,235			33,947
Prepaid expenses and other current assets	3,847			3,161
Income taxes receivable	787			—
Deferred income taxes	799			1,276
Total current assets	43,650			40,504
Property and equipment, net	113,294			109,792
Restricted cash	4,111			4,111
Intangible assets, net	37,945			40,771
Goodwill	21,917			23,105
Other assets	426			411
Total assets	$	221,343		$	218,694
Liabilities And Stockholders’ Equity
Current Liabilities:
Accounts payable	$	4,484		$	6,333
Deferred revenue	5,381			3,919
Accrued liabilities	7,506			7,322
Accrued salaries and benefits	5,040			7,570
Income taxes payable	972			426
Current portion of closure and post-closure obligations	937			1,913
Total current liabilities	24,320			27,483
Long-term closure and post-closure obligations	16,315			15,449
Reducing revolving line of credit	43,000			45,000
Other long-term liabilities	88			114
Unrecognized tax benefits	474			467
Deferred income taxes	15,338			18,159
Total liabilities	99,535			106,672
Commitments and contingencies
Stockholders’ Equity:
Common stock $0.01 par value, 50,000 authorized; 18,530 and 18,385 shares issued, respectively	185			184
Additional paid-in capital	65,603			63,969
Retained earnings	57,725			48,424
Treasury stock, at cost, 24 and 71 shares, respectively	(404		)	(1,183		)
Accumulated other comprehensive income (loss)	(1,301		)	628
Total stockholders’ equity	121,808			112,022
Total liabilities and stockholders’ equity	$	221,343		$	218,694

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

3

US ECOLOGY, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share amounts)

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Revenue	$	45,777		$	39,980		$	88,676		$	72,993
Direct operating costs	19,759			18,633			40,843			36,271
Transportation costs	7,090			4,021			13,523			7,320
Gross profit	18,928			17,326			34,310			29,402
Selling, general and administrative expenses	6,519			6,366			12,245			11,971
Operating income	12,409			10,960			22,065			17,431
Other income (expense):
Interest income	2			4			7			9
Interest expense	(222		)	(204		)	(443		)	(428		)
Foreign currency gain (loss)	(1,193		)	(921		)	(2,131		)	170
Other	94			522			191			602
Total other income (expense)	(1,319		)	(599		)	(2,376		)	353
Income before income taxes	11,090			10,361			19,689			17,784
Income tax expense	3,880			3,999			7,073			6,899
Net income	$	7,210		$	6,362		$	12,616		$	10,885
Earnings per share:
Basic	$	0.39		$	0.35		$	0.69		$	0.60
Diluted	$	0.39		$	0.35		$	0.68		$	0.60
Shares used in earnings per share calculation:
Basic	18,401			18,228			18,362			18,223
Diluted	18,483			18,264			18,446			18,259
Dividends paid per share	$	0.18		$	0.18		$	0.18		$	0.36

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

4

US ECOLOGY, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In thousands)

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Net income	$	7,210		$	6,362		$	12,616		$	10,885
Other comprehensive income (loss):
Foreign currency translation gain (loss)	(1,179		)	(500		)	(1,929		)	135
Comprehensive income	$	6,031		$	5,862		$	10,687		$	11,020

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

5

US ECOLOGY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

	Six Months Ended June 30,
	2013			2012
Cash flows from operating activities:
Net income	$	12,616		$	10,885
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property and equipment	7,071			6,794
Amortization of intangible assets	729			724
Accretion of closure and post-closure obligations	613			670
Unrealized foreign currency (gain) loss	2,400			(250		)
Deferred income taxes	(1,665		)	(1,218		)
Share-based compensation expense	363			383
Unrecognized tax benefits	7			7
Net (gain) loss on sale of property and equipment	10			(20		)
Changes in assets and liabilities:
Receivables	(682		)	839
Income tax receivable	(787		)	191
Other assets	(563		)	(390		)
Accounts payable and accrued liabilities	(1,583		)	(3,699		)
Deferred revenue	1,594			412
Accrued salaries and benefits	(2,386		)	(307		)
Income tax payable	582			761
Closure and post-closure obligations	(621		)	(186		)
Net cash provided by operating activities	17,698			15,596
Cash flows from investing activities:
Purchases of property and equipment	(12,530		)	(5,743		)
Business acquisition, net of cash acquired	—			(11,228		)
Proceeds from sale of property and equipment	52			169
Restricted cash	—			5
Net cash used in investing activities	(12,478		)	(16,797		)
Cash flows from financing activities:
Payments on reducing revolving line of credit	(10,000		)	(12,500		)
Proceeds from reducing revolving line of credit	8,000			22,000
Proceeds from exercise of stock options	2,110			—
Deferred financing costs paid	(185		)	—
Dividends paid	(3,314		)	(6,565		)
Other	261			(258		)
Net cash (used in) provided by financing activities	(3,128		)	2,677
Effect of foreign exchange rate changes on cash	(230		)	140
Increase in cash and cash equivalents	1,862			1,616
Cash and cash equivalents at beginning of period	2,120			4,289
Cash and cash equivalents at end of period	$	3,982		$	5,905
Supplemental Disclosures
Income taxes paid, net of receipts	$	8,677		$	7,148
Interest paid	$	367		$	418
Non-cash investing and financing activities:
Capital expenditures in accounts payable	$	504		$	2,446
Restricted stock issued from treasury shares	$	779		$	372

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

6

US ECOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1.GENERAL

Basis of Presentation

The accompanying unaudited consolidated financial statements include the results of operations, financial position and cash flows of US Ecology, Inc. and its wholly-owned subsidiaries. All significant intercompany balances have been eliminated.  Throughout these financial statements words such as “we,” “us,” “our,” “US Ecology” and the “Company” refer to US Ecology, Inc. and its subsidiaries.

In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments necessary to present fairly, in all material respects, the results of the Company for the periods presented. These consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been omitted pursuant to the rules and regulations of the SEC. These consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012. The results of operations and cash flows for the six months ended June 30, 2013 are not necessarily indicative of results to be expected for the entire fiscal year.

The Company’s Consolidated Balance Sheet as of December 31, 2012 has been derived from the Company’s audited Consolidated Balance Sheet as of that date.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from the estimates and assumptions that we use in the preparation of our financial statements. As it relates to estimates and assumptions in amortization rates and environmental obligations, significant engineering, operations and accounting judgments are required. We review these estimates and assumptions no less than annually. In many circumstances, the ultimate outcome of these estimates and assumptions will not be known for decades into the future. Actual results could differ materially from these estimates and assumptions due to changes in applicable regulations, changes in future operational plans and inherent imprecision associated with estimating environmental impacts far into the future.

Financial Instruments

Cash on deposit, accounts receivable, short-term borrowings, accounts payable and accrued liabilities as presented in the consolidated financial statements approximate fair value because of the short-term nature of these instruments.  The carrying amount of our long-term debt approximates fair value because interest rates are variable and, accordingly, approximate current market rates for instruments with similar risk and maturities. Restricted cash balances represent funds held in third-party managed trust accounts as collateral for our financial assurance obligations for post-closure activities at our non-operating facilities.  Restricted cash balances are maintained by third-party trustees and are invested in money market accounts.  The balances are adjusted monthly to fair market value based on quoted prices in active markets for identical assets.

7

NOTE 2.ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Changes in accumulated other comprehensive income (loss), comprised entirely of foreign currency translation adjustments, consisted of the following:

	Three Months Ended June 30,						Six Months Ended June 30,
$s in thousands	2013			2012			2013			2012
Balance, beginning of period	$	(122	)	$	518		$	628		$	(117	)
Foreign currency translation gain (loss) in other comprehensive income	(1,179		)	(500		)	(1,929		)	135
Balance, end of period	$	(1,301	)	$	18		$	(1,301	)	$	18

NOTE 3.CONCENTRATIONS AND CREDIT RISK

Major Customers

No customer accounted for more than 10% of total revenue for the three and six months ended June 30, 2013 or 2012. No customer accounted for more than 10% of total trade receivables as of June 30, 2013 or December 31, 2012.

Credit Risk Concentration

We maintain most of our cash with nationally recognized financial institutions like Wells Fargo Bank, National Association (“Wells Fargo”). Substantially all balances are uninsured and are not used as collateral for other obligations. Concentrations of credit risk on accounts receivable are believed to be limited due to the number, diversification and character of the obligors and our credit evaluation process.

NOTE 4.RECEIVABLES

Receivables consisted of the following:

	June 30,			December 31,
$s in thousands	2013			2012
Trade	$	33,014		$	32,787
Unbilled revenue	1,396			1,529
Other	289			99
Total receivables	34,699			34,415
Allowance for doubtful accounts	(464		)	(468		)
Receivables, net	$	34,235		$	33,947

NOTE 5.PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

	June 30,			December 31,
$s in thousands	2013			2012
Cell development costs	$	65,239		$	64,994
Land and improvements	18,090			14,920
Buildings and improvements	55,949			55,177
Railcars	17,375			17,375
Vehicles and other equipment	42,235			39,689
Construction in progress	14,985			12,454
Total property and equipment	213,873			204,609
Accumulated depreciation and amortization	(100,579		)	(94,817		)
Property and equipment, net	$	113,294		$	109,792

8

Depreciation and amortization expense for each of the three months ended June 30, 2013 and 2012 was $3.6 million. Depreciation and amortization expense for the six months ended June 30, 2013 and 2012 was $7.1 million and $6.8 million, respectively.

NOTE 6.BUSINESS COMBINATION

On May 31, 2012, the Company acquired 100% of the outstanding shares of US Ecology Michigan, Inc. (“US Ecology Michigan”), formerly Dynecol, Inc., a chemical and industrial byproducts treatment and reuse facility located in Detroit, Michigan. The following unaudited pro forma financial information presents the combined results of operations as if US Ecology Michigan had been combined with us beginning on January 1, 2012. The pro forma financial information includes the accounting impact of the business combination, including the amortization of intangible assets, depreciation of property, plant and equipment and interest expense. The unaudited pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of the period presented, nor should it be taken as an indication of our future consolidated results of operations.

	(unaudited)		(unaudited)
	Three Months Ended		Six Months Ended
$s in thousands, except per share amounts	June 30, 2012		June 30, 2012
Pro forma combined:
Revenue	$	42,011	$	78,494
Net income	$	6,248	$	10,739
Earnings per share
Basic	$	0.34	$	0.59
Diluted	$	0.34	$	0.59

The amounts of revenue and operating income from US Ecology Michigan included in US Ecology’s consolidated statements of operations for the three months ended June 30, 2013 were $3.4 million and $288,000, respectively. The amounts of revenue and operating income from US Ecology Michigan included in US Ecology’s consolidated statements of operations for the six months ended June 30, 2013 were $6.2 million and $193,000, respectively.

NOTE 7.GOODWILL AND INTANGIBLE ASSETS

The Company’s entire goodwill balance has been assigned to the Operating Disposal Facilities reporting segment.  Changes in goodwill for the six months ended June 30, 2013 consisted of the following:

$s in thousands	Goodwill
Balance at December 31, 2012	$	23,105
Foreign currency translation	(1,188		)
Balance at June 30, 2013	$	21,917

Intangible assets consisted of the following:

$s in thousands	June 30, 2013			December 31, 2012
Amortizing intangible assets:
Developed software	$	333		$	352
Database	95			100
Customer relationships	5,046			5,269
Technology - Formulae and processes	8,645			9,144
Permits, licenses and lease	26,553			28,085
Non-compete agreements	20			20
Total amortizing intangible assets	40,692			42,970
Accumulated amortization	(3,659		)	(3,120		)
Nonamortizing intangible assets:
Permits and licenses	750			750
Tradename	162			171
Total intangible assets, net	$	37,945		$	40,771

9

Amortization expense for the three months ended June 30, 2013 and 2012 was $362,000 and $374,000, respectively. Amortization expense for the six months ended June 30, 2013 and 2012 was $729,000 and $724,000, respectively.

NOTE 8.DEBT

On October 29, 2010, we entered a credit agreement with Wells Fargo which, as amended, provides for an aggregate commitment from Wells Fargo of $95.0 million (the “Credit Agreement”). The Credit Agreement provides for a $20.0 million revolving line of credit (the “Revolving Line of Credit”) with a maturity date of November 1, 2015 and a $75.0 million reducing revolving line of credit (the “Reducing Revolving Line of Credit”) with a maturity date of November 1, 2015.

Revolving Line of Credit

The Revolving Line of Credit provides up to $20.0 million in revolving credit loans or letters of credit for working capital needs (the “Commitment Amount”).  Under the Revolving Line of Credit, revolving loans are available based on the Prime Rate or the LIBOR, at the Company’s option, plus an applicable margin which is determined according to a pricing grid under which the interest rate decreases or increases based on our ratio of funded debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”). At June 30, 2013, the effective interest rate on the Revolving Line of Credit was 1.44%. Interest only payments are due either monthly or on the last day of any interest period, as applicable. At June 30, 2013, there were no borrowings outstanding under the Revolving Line of Credit. The availability under the Revolving Line of Credit was $16.0 million, with $4.0 million of the line of credit issued in the form of a standby letter of credit utilized as collateral for closure and post-closure financial assurance.

Reducing Revolving Line of Credit

The Reducing Revolving Line of Credit provides an initial commitment amount of $75.0 million (the “Reducing Revolving Commitment Amount”).  Proceeds from the Reducing Revolving Line of Credit were used to acquire all of the shares of Stablex in 2010 and to acquire US Ecology Michigan in 2012. Remaining borrowings are available for working capital needs. The Reducing Revolving Commitment Amount is reduced by $2.8 million on the last day of each March, June, September and December beginning March 31, 2013, continuing through November 1, 2015. Under the Reducing Revolving Line of Credit revolving loans are available based on the Prime Rate or LIBOR, at the Company’s option, plus an applicable margin, which is determined according to a pricing grid under which the interest rate decreases or increases based on our ratio of funded debt to EBITDA. At June 30, 2013, the effective interest rate of the Reducing Revolving Line of Credit was 1.44%.  Interest only payments are due either monthly or on the last day of any interest period, as applicable.  At June 30, 2013, $43.0 million was outstanding on the Reducing Revolving Line of Credit with $26.4 million available for additional borrowings.

In addition to standard fees, origination fees and commitment fees apply to the average daily unused portion of the Commitment Amount and the Reducing Revolving Commitment Amount. The Credit Agreement contains certain quarterly financial covenants, including a maximum funded debt ratio, a maximum fixed charge coverage ratio, a minimum required tangible net worth and a minimum current ratio. We may only declare quarterly or annual dividends if on the date of declaration, no event of default has occurred and no other event or condition has occurred that would constitute default due to the payment of the dividend. Obligations under the Credit Agreement are guaranteed by US Ecology and all of its subsidiaries.

At June 30, 2013, we were in compliance with all of the financial covenants in the Credit Agreement.

NOTE 9.CLOSURE AND POST-CLOSURE OBLIGATIONS

Our accrued closure and post-closure obligations represent the expected future costs, including corrective actions, associated with closure and post-closure of our operating and non-operating disposal facilities. Liabilities are recorded when work is probable and the costs can be reasonably estimated. We perform periodic reviews of both non-operating and operating facilities and revise accruals for estimated closure and post-closure, remediation or other costs as necessary. Recorded liabilities are based on our best estimates of current costs and are updated periodically to include the effects of existing technology, presently enacted laws and regulations, inflation and other economic factors.

10

Changes in closure and post-closure obligations consisted of the following:

	Three Months Ended			Six Months Ended
$s in thousands	June 30, 2013			June 30, 2013
Closure and post-closure obligations, beginning of period	$	16,586		$	17,362
Accretion expense	306			613
Payments	(128		)	(1,171		)
Adjustments	550			550
Currency translation	(62		)	(102		)
Closure and post-closure obligations, end of period	17,252			17,252
Less current portion	(937		)	(937		)
Long-term portion	$	16,315		$	16,315

NOTE 10.INCOME TAXES

During the six months ended June 30, 2013, there were no material changes to our unrecognized tax benefits disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012. We do not anticipate our total unrecognized tax benefits to increase or decrease materially within the next twelve months.

Our effective tax rate for the three months ended June 30, 2013 was 35.0%, down from 38.6% for the three months ended June 30, 2012. Our effective tax rate for the six months ended June 30, 2013 was 35.9%, down from 38.8% for the six months ended June 30, 2012. The decrease for both the three and six months ended June 30, 2013 reflects a higher proportion of earnings from our Canadian operations, which are taxed at a lower corporate tax rate, partially offset by higher U.S. state income taxes.

We file a consolidated U.S. federal income tax return with the Internal Revenue Service as well as income tax returns in various states and Canada. We may be subject to examination by taxing authorities in the U.S. and Canada for tax years 2009 through 2012. Additionally, we may be subject to examinations by various state and local taxing jurisdictions for tax years 2008 through 2012.

NOTE 11.COMMITMENTS AND CONTINGENCIES

Litigation and Regulatory Proceedings

In the ordinary course of business, we are involved in judicial and administrative proceedings involving federal, state, provincial or local governmental authorities, including regulatory agencies that oversee and enforce compliance with permits. Fines or penalties may be assessed by our regulators for non-compliance.  Actions may also be brought by individuals or groups in connection with permitting of planned facilities, modification or alleged violations of existing permits, or alleged damages suffered from exposure to hazardous substances purportedly released from our operated sites, as well as other litigation. We maintain insurance intended to cover property and damage claims asserted as a result of our operations. Periodically, management reviews and may establish reserves for legal and administrative matters, or other fees expected to be incurred in relation to these matters.

In 2012, we settled allegations by the United States Environment Protection Agency (“U.S. EPA”) that the thermal recycling operation at our Robstown, Texas facility did not comply with certain rules and regulations of the Resource Conservation and Recovery Act of 1976 (“RCRA”). As part of the settlement, we agreed to pay a civil penalty and to submit an application to the State of Texas for a RCRA Subpart X permit.  The Company and the thermal recycling unit’s owner-operator also agreed to a set of interim operating conditions that allow the facility to continue providing recycling services to customers until the RCRA Subpart X permit is issued.

In connection with this matter, in June 2013 the U.S. EPA asserted various related technical compliance and permitting violations of the Clean Air Act of 1970. Negotiations on the merits of a proposed settlement are ongoing with the U.S. EPA. We recognized a charge of $238,000 during the second quarter of 2013 in Selling, general and administrative expenses in the Consolidated Statement of Operations related to this enforcement matter.

Other than as disclosed above, we are not currently a party to any material pending legal proceedings and are not aware of any other claims that could have a materially adverse effect on our financial position, results of operations or cash flows.

11

Operating Leases

In May 2013, we executed a new lease for corporate office space in Boise, Idaho.  Future minimum lease payments on this non-cancelable operating lease as of June 30, 2013 consisted of the following:

$s in thousands	Payments
2013	$	34
2014	245
2015	301
2016	310
2017	318
Thereafter	382
	$	1,590

NOTE 12.EARNINGS PER SHARE

	Three Months Ended June 30,
$s and shares in thousands, except per share	2013				2012
amounts	Basic		Diluted		Basic		Diluted
Net income	7,210		$	7,210	$	6,362	$	6,362
Weighted average basic shares outstanding	18,401		18,401		18,228		18,228
Dilutive effect of stock options and restricted stock			82				36
Weighted average diluted shares outstanding			18,483				18,264
Earnings per share	$	0.39	$	0.39	$	0.35	$	0.35
Anti-dilutive shares excluded from calculation			196				331

	Six Months Ended June 30,
$s and shares in thousands, except per share	2013				2012
amounts	Basic		Diluted		Basic		Diluted
Net income	$	12,616	$	12,616	$	10,885	$	10,885
Weighted average basic shares outstanding	18,362		18,362		18,223		18,223
Dilutive effect of stock options and restricted stock			84				36
Weighted average diluted shares outstanding			18,446				18,259
Earnings per share	$	0.69	$	0.68	$	0.60	$	0.60
Anti-dilutive shares excluded from calculation			208				324

NOTE 13.EQUITY

During the six months ended June 30, 2013, option holders exercised 238,345 options, respectively, with a weighted-average exercise price of $18.95 per option. During the six months ended June 30, 2013, the Company issued 46,700 shares of restricted stock from our treasury stock at an average cost of $16.68 per share.

12

NOTE 14.    OPERATING SEGMENTS

We operate within two segments, Operating Disposal Facilities and Non-Operating Disposal Facilities. These segments reflect our internal reporting structure and nature of services offered. The Operating Disposal Facility segment represents disposal facilities accepting hazardous and radioactive waste. The Non-Operating Disposal Facility segment represents facilities which are not accepting hazardous and/or radioactive waste or formerly proposed new facilities.

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

Summarized financial information concerning our reportable segments is shown in the following tables:

Three Months Ended June 30, 2013 (in thousands)	Operating Disposal Facilities		Non- Operating Disposal Facilities			Corporate			Total
Revenue - Treatment and disposal	$	38,724	$	6		$	—		$	38,730
Revenue - Transportation services	7,047		—			—			7,047
Total revenue	45,771		6			—			45,777
Direct operating costs	19,705		54			—			19,759
Transportation costs	7,090		—			—			7,090
Gross profit (loss)	18,976		(48		)	—			18,928
Selling, general & administrative expense	3,267		—			3,252			6,519
Operating income (loss)	15,709		(48		)	(3,252		)	12,409
Interest income (expense), net	2		—			(222		)	(220		)
Foreign currency gain (loss)	320		—			(1,513		)	(1,193		)
Other income	91		3			—			94
Income (loss) before income taxes	16,122		(45		)	(4,987		)	11,090
Income tax expense	—		—			3,880			3,880
Net income (loss)	$	16,122	$	(45	)	$	(8,867	)	$	7,210
Depreciation, amortization & accretion	$	4,051	$	52		$	10		$	4,113
Capital expenditures	$	5,689	$	—		$	89		$	5,778
Total assets	$	213,197	$	88		$	8,058		$	221,343

Three Months Ended June 30, 2012 (in thousands)	Operating Disposal Facilities		Non- Operating Disposal Facilities			Corporate			Total
Revenue - Treatment and disposal	$	35,963	$	7		$	—		$	35,970
Revenue - Transportation services	4,010		—			—			4,010
Total revenue	39,973		7			—			39,980
Direct operating costs	18,576		57			—			18,633
Transportation costs	4,020		1			—			4,021
Gross profit (loss)	17,377		(51		)	—			17,326
Selling, general & administrative expense	2,921		—			3,445			6,366
Operating income (loss)	14,456		(51		)	(3,445		)	10,960
Interest income (expense), net	4		—			(204		)	(200		)
Foreign currency gain (loss)	17		—			(938		)	(921		)
Other income	521		1			—			522
Income (loss) before income taxes	14,998		(50		)	(4,587		)	10,361
Income tax expense	—		—			3,999			3,999
Net income (loss)	$	14,998	$	(50	)	$	(8,586	)	$	6,362
Depreciation, amortization & accretion	$	4,215	$	54		$	11		$	4,280
Capital expenditures	$	3,350	$	—		$	7		$	3,357
Total assets	$	206,652	$	103		$	9,370		$	216,125

13

Six Months Ended June 30, 2013 (in thousands)	Operating Disposal Facilities		Non- Operating Disposal Facilities			Corporate			Total
Revenue - Treatment and disposal	$	75,064	$	10		$	—		$	75,074
Revenue - Transportation services	13,602		—			—			13,602
Total revenue	88,666		10			—			88,676
Direct operating costs	40,736		107			—			40,843
Transportation costs	13,523		—			—			13,523
Gross profit (loss)	34,407		(97		)	—			34,310
Selling, general & administrative expense	5,913		—			6,332			12,245
Operating income (loss)	28,494		(97		)	(6,332		)	22,065
Interest income (expense), net	6		—			(442		)	(436		)
Foreign currency gain (loss)	432		—			(2,563		)	(2,131		)
Other income	186		5			—			191
Income (loss) before income taxes	29,118		(92		)	(9,337		)	19,689
Income tax expense	—		—			7,073			7,073
Net income (loss)	$	29,118	$	(92	)	$	(16,410	)	$	12,616
Depreciation, amortization & accretion	$	8,291	$	104		$	18		$	8,413
Capital expenditures	$	12,415	$	—		$	115		$	12,530
Total assets	$	213,197	$	88		$	8,058		$	221,343

Six Months Ended June 30, 2012 (in thousands)	Operating Disposal Facilities			Non- Operating Disposal  Facilities			Corporate			Total
Revenue - Treatment and disposal	$	65,908		$	11		$	—		$	65,919
Revenue - Transportation services	7,074			—			—			7,074
Total revenue	72,982			11			—			72,993
Direct operating costs	36,159			112			—			36,271
Transportation costs	7,319			1			—			7,320
Gross profit (loss)	29,504			(102		)	—			29,402
Selling, general & administrative expense	5,442			—			6,529			11,971
Operating income (loss)	24,062			(102		)	(6,529		)	17,431
Interest income (expense), net	9			—			(428		)	(419		)
Foreign currency gain (loss)	(82		)	—			252			170
Other income	601			1			—			602
Income (loss) before income taxes	24,590			(101		)	(6,705		)	17,784
Income tax expense	—			—			6,899			6,899
Net income (loss)	$	24,590		$	(101	)	$	(13,604	)	$	10,885
Depreciation, amortization & accretion	$	8,059		$	108		$	21		$	8,188
Capital expenditures	$	5,710		$	17		$	16		$	5,743
Total assets	$	206,652		$	103		$	9,370		$	216,125

Revenue, Property and Equipment and Intangible Assets Outside of the United States

We provide services in the United States and Canada. Revenues by geographic location where the underlying services were performed consisted of the following:

Geographic disclosure

	Three Months Ended June 30,				Six Months Ended June 30,
$s in thousands	2013		2012		2013		2012
United States	$	32,620	$	30,939	$	64,019	$	55,538
Canada	13,157		9,041		24,657		17,455
Total revenue	$	45,777	$	39,980	$	88,676	$	72,993

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Long-lived assets, comprised of property and equipment and intangible assets net of accumulated depreciation and amortization, by geographic location consisted of the following:

	June 30,		December 31,
$s in thousands	2013		2012
United States	$	85,875	$	81,605
Canada	65,364		68,958
Total long-lived assets	$	151,239	$	150,563

NOTE 15.SUBSEQUENT EVENT

On July 1, 2013, we declared a quarterly dividend of $0.18 per common share to stockholders of record on July 17, 2013. The dividend was paid using cash on hand on July 25, 2013 in an aggregate amount of $3.3 million.

15

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
US Ecology, Inc.
Boise, Idaho

We have reviewed the accompanying consolidated balance sheet of US Ecology, Inc. and subsidiaries (the “Company”) as of June 30, 2013, and the related consolidated statements of operations and comprehensive income for the three-month and six-month periods ended June 30, 2013 and 2012, and the consolidated statements of cash flows for the six-month periods ended June 30, 2013 and 2012. These interim financial statements are the responsibility of the Company’s management.

We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to such consolidated interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of US Ecology, Inc. and subsidiaries as of December 31, 2012, and the related consolidated statements of operations, comprehensive income, cash flows, and stockholders’ equity for the year then ended (not presented herein); and in our report dated March 1, 2013, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2012 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

/s/ Deloitte & Touche LLP

Boise, Idaho

August 1, 2013

16

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

The information contained in this section should be read in conjunction with our unaudited consolidated financial statements and related notes thereto appearing elsewhere in this quarterly report on Form 10-Q. In this report words such as “we,” “us,” “our,” “US Ecology” and the “Company” refer to US Ecology, Inc. and its subsidiaries.

OVERVIEW

US Ecology is a hazardous, polychlorinated biphenyls (“PCBs”), non-hazardous and radioactive waste services company providing treatment, disposal, recycling and transportation services to commercial and government entities including, but not limited to, oil refineries, chemical production facilities, manufacturers, electric utilities, steel mills, biotechnology companies, operating and closed military installations, waste brokers/aggregators and medical and academic institutions. The majority of the waste received at our facilities is produced in the United States.

On May 31, 2012, the Company acquired 100% of the outstanding shares of US Ecology Michigan, Inc. (“US Ecology Michigan”), formerly Dynecol, Inc., a chemical and industrial byproducts treatment and reuse facility located in Detroit, Michigan, for a total purchase price of $10.8 million, including net working capital adjustments. The acquisition strengthens our presence in key mid-western and eastern U.S. and Canadian markets. In addition, US Ecology Michigan provides us with an opportunity to win more Event Business (as defined below) work; increase service delivery to existing customers including national accounts; expand our transportation logistics services; and attract new customers.  Management also believes that the acquisition offers meaningful synergies in combination with our Stablex facility. Revenue from US Ecology Michigan included in US Ecology’s consolidated statements of operations was $6.2 million for the six months ended June 30, 2013.

We generate revenue from fees charged to treat and dispose of waste at our six fixed disposal facilities located near Grand View, Idaho; Richland, Washington; Beatty, Nevada; Robstown, Texas; Detroit, Michigan and Blainville, Québec, Canada. We own and manage a dedicated fleet of gondola railcars and arrange for the transportation of waste to our facilities. Transportation services have contributed significant revenue since acquisition of our railcar fleet. We also utilize our railcar fleet to transport waste disposed at facilities operated by other companies on a less frequent basis. We or our predecessor companies have been in the waste business since 1952.

Our customers may be divided into categories to better evaluate period-to-period changes in treatment and disposal (“T&D”) revenue based on service mix and type of business (recurring customer “Base Business” or discrete “clean-up” project “Event Business”).  Each of these categories is described in the table below, along with information on the percentage of total treatment and disposal revenues by category for the three and six months ended June 30, 2013 and 2012.

17

Customer		% of Treatment and Disposal Revenue (1),(2) for the Three Months Ended June 30,
Category	Description	2013		2012
Broker	Companies that collect and aggregate waste from their direct customers, generally comprised of Base Business with periodic Event Business for larger projects.	50	%	52	%
Other industry	Electric utilities, chemical manufacturers, steel mill and other industrial customers not included in other categories, comprised of both Base and Event Business.	15	%	17	%
Refinery	Petroleum refinery customers, comprised of both Base and Event Business.	13	%	8	%
Private Clean-up	Private sector clean-up project waste, typically Event Business.	12	%	6	%
Government	Federal and State government clean-up project waste, comprised of both Base and Event Business.	6	%	13	%
Rate regulated	Northwest and Rocky Mountain Compact customers paying rate-regulated disposal fees set by the State of Washington, predominantly Base Business.	4	%	4	%

(1) Excludes all transportation service revenue

(2) Excludes US Ecology Michigan which was acquired on May 31, 2012

Customer		% of Treatment and Disposal Revenue (1),(2) for the Six Months Ended June 30,
Category	Description	2013		2012
Broker	Companies that collect and aggregate waste from their direct customers, generally comprised of Base Business with periodic Event Business for larger projects.	51	%	53	%
Other industry	Electric utilities, chemical manufacturers, steel mill and other industrial customers not included in other categories, comprised of both Base and Event Business.	15	%	18	%
Refinery	Petroleum refinery customers, comprised of both Base and Event Business.	12	%	9	%
Private Clean-up	Private sector clean-up project waste, typically Event Business.	11	%	5	%
Government	Federal and State government clean-up project waste, comprised of both Base and Event Business.	7	%	11	%
Rate regulated	Northwest and Rocky Mountain Compact customers paying rate-regulated disposal fees set by the State of Washington, predominantly Base Business.	4	%	4	%

(1) Excludes all transportation service revenue

(2) Excludes US Ecology Michigan which was acquired on May 31, 2012

18

A significant portion of our disposal revenue is attributable to discrete Event Business projects which vary widely in size, duration and unit pricing. For each of the three and six month periods ended June 30, 2013, approximately 37% of our T&D revenue was derived from Event Business projects (excluding US Ecology Michigan). The one-time nature of Event Business, diverse spectrum of waste types received and widely varying unit pricing necessarily creates variability in revenue and earnings. This variability may be influenced by general and industry-specific economic conditions, funding availability, changes in laws and regulations, government enforcement actions or court orders, public controversies, litigation, weather, commercial real estate, closed military bases and other redevelopment project timing, government appropriation and funding cycles and other factors. The types and amounts of waste received from Base Business also vary from quarter to quarter.  This variability can cause significant quarter-to-quarter and year-to-year differences in revenue, gross profit, gross margin, operating income and net income. Also, while we pursue many large projects months or years in advance of work performance, both large and small clean-up project opportunities routinely arise with little or no prior notice. These market dynamics are inherent to the hazardous and radioactive waste disposal business and are factored into our projections and externally communicated business outlook statements. Our projections combine historical experience with identified sales pipeline opportunities, new or expanded service line projections and prevailing market conditions.

Depending on project-specific customer needs and competitive economics, transportation services may be offered at or near our cost to help secure new business. For waste transported by rail from the eastern United States and other locations distant from our Grand View, Idaho and Robstown, Texas facilities, transportation-related revenue can account for as much as three-fourths (75%) of total project revenue. While bundling transportation and disposal services reduces overall gross profit as a percentage of total revenue (“gross margin”), this value-added service has allowed us to win multiple projects that management believes we could not have otherwise competed for successfully.  Our Company-owned fleet of 234 gondola railcars, which may be supplemented with additional railcars obtained under operating leases, has reduced our transportation expenses by largely eliminating reliance on more costly short-term rentals.   These Company-owned railcars also allow us to win business during times of demand-driven railcar scarcity.

The increased waste volumes resulting from projects won through this bundling strategy further drive the operating leverage inherent to the disposal business and increase profitability.  While waste treatment and other variable costs are project-specific, the incremental earnings contribution from large and small projects generally increases as overall disposal volumes increase.  Based on past experience, management believes that maximizing operating income, net income and earnings per share is a higher priority than maintaining or increasing gross margin.  We intend to continue aggressively bidding bundled transportation and disposal services based on this well established strategy.

To maximize utilization of our railcar fleet, we periodically deploy available railcars to transport waste from clean-up sites to disposal facilities operated by other companies.  Such transportation services may be bundled with for-profit logistics and field services support work.

We serve oil refineries, chemical production plants, steel mills, waste brokers/aggregators serving small manufacturers and other industrial customers that are generally affected by the prevailing economic conditions and credit environment. Such conditions may cause our customers as well as those they serve to curtail operations, resulting in lower waste production and/or delayed spending on off-site waste shipments, maintenance, waste clean-up projects and other work.  Factors that can impact general economic conditions and the level of spending by our customers include, but are not limited to, consumer and industrial spending, increases in fuel and energy costs, conditions in the real estate and mortgage markets, labor and healthcare costs, access to credit, consumer confidence and other global economic factors affecting spending behavior.  Market forces may also induce customers to reduce or cease operations, declare bankruptcy, liquidate or relocate to other countries, any of which could adversely affect our business.  To the extent our business is driven by government regulations or enforcement actions, we believe it is less susceptible to general economic conditions.  Spending by government agencies may also be reduced due to declining tax revenues resulting from a weak economy or changes in policy. Disbursement of funds appropriated by Congress may also be delayed for administrative or other reasons.

19

RESULTS OF OPERATIONS

The following table summarizes our results of operations for the three and six months ended June 30, 2013 and 2012 in dollars and as a percentage of total revenue.

$s and shares in thousands, except per share amounts	Three Months Ended June 30,										Six Months Ended June 30,
	2013			%		2012			%		2013			%		2012			%
Revenue	$	45,777		100.0	%	$	39,980		100.0	%	$	88,676		100.0	%	$	72,993		100.0	%
Direct operating costs	19,759			43.2	%	18,633			46.6	%	40,843			46.1	%	36,271			49.7	%
Transportation costs	7,090			15.5	%	4,021			10.1	%	13,523			15.2	%	7,320			10.0	%
Gross profit	18,928			41.3	%	17,326			43.3	%	34,310			38.7	%	29,402			40.3	%
Selling, general and administrative expenses	6,519			14.2	%	6,366			15.9	%	12,245			13.8	%	11,971			16.4	%
Operating income	12,409			27.1	%	10,960			27.4	%	22,065			24.9	%	17,431			23.9	%
Other income (expense):
Interest income	2			0.0	%	4			0.0	%	7			0.0	%	9			0.0	%
Interest expense	(222		)	-0.5	%	(204		)	-0.5	%	(443		)	-0.5	%	(428		)	-0.6	%
Foreign currency gain (loss)	(1,193		)	-2.6	%	(921		)	-2.3	%	(2,131		)	-2.4	%	170			0.2	%
Other	94			0.2	%	522			1.3	%	191			0.2	%	602			0.9	%
Total other income (expense)	(1,319		)	-2.9	%	(599		)	-1.5	%	(2,376		)	-2.7	%	353			0.5	%
Income before income taxes	11,090			24.2	%	10,361			25.9	%	19,689			22.2	%	17,784			24.4	%
Income taxes	3,880			8.4	%	3,999			10.0	%	7,073			8.0	%	6,899			9.5	%
Net income	$	7,210		15.8	%	$	6,362		15.9	%	$	12,616		14.2	%	$	10,885		14.9	%
Earnings per share:
Basic	$	0.39				$	0.35				$	0.69				$	0.60
Dilutive	$	0.39				$	0.35				$	0.68				$	0.60
Shares used in earnings per share calculation:
Basic	18,401					18,228					18,362					18,223
Dilutive	18,483					18,264					18,446					18,259
Dividends paid per share	$	0.18				$	0.18				$	0.18				$	0.36
Other Financial Data:
Adjusted EBITDA (1)	$	16,927				$	15,420				$	30,841				$	26,002

(1)  For all periods presented, Adjusted EBITDA is defined as net income before net interest expense, income tax expense, depreciation, amortization, stock based compensation, accretion of closure and post-closure liabilities, foreign currency gain/loss and other income/expense, which are not considered part of usual business operations.  Adjusted EBITDA is a complement to results provided in accordance with accounting principles generally accepted in the United States (“GAAP”) and we believe that such information provides additional useful information to analysts, stockholders and other users to understand the Company’s operating performance. Since Adjusted EBITDA is not a measurement determined in accordance with GAAP and is thus susceptible to varying calculations, Adjusted EBITDA as presented may not be comparable to other similarly titled measures of other companies. Items excluded from Adjusted EBITDA are significant components in understanding and assessing our financial performance. Adjusted EBITDA should not be considered in isolation or as an alternative to, or substitute for, net income, cash flows generated by operations, investing or financing activities, or other financial statement data presented in the consolidated financial statements as indicators of financial performance or liquidity.  Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation or a substitute for analyzing our results as reported under GAAP.  Some of the limitations are:

·Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

·Adjusted EBITDA does not reflect our interest expense, or the requirements necessary to service interest or principal payments on our debt;

·Adjusted EBITDA does not reflect our income tax expenses or the cash requirements to pay our taxes;

·Adjusted EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments; and

·Although depreciation and amortization charges are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements.

20

The following reconciliation itemizes the differences between reported Net income and Adjusted EBITDA for the three and six months ended June 30, 2013 and 2012:

	Three Months Ended June 30,						Six Months Ended June 30,
$s in thousands	2013			2012			2013			2012
Net income	$	7,210		$	6,362		$	12,616		$	10,885
Income tax expense	3,880			3,999			7,073			6,899
Interest expense	222			204			443			428
Interest income	(2		)	(4		)	(7		)	(9		)
Foreign currency (gain) loss	1,193			921			2,131			(170		)
Other income	(94		)	(522		)	(191		)	(602		)
Depreciation and amortization of plant and equipment	3,632			3,571			7,071			6,794
Amortization of intangibles	362			374			729			724
Stock-based compensation	218			180			363			383
Accretion and non-cash adjustment of closure & post-closure liabilities	306			335			613			670
Adjusted EBITDA	$	16,927		$	15,420		$	30,841		$	26,002

THREE MONTHS ENDED JUNE 30, 2013 COMPARED TO THREE MONTHS ENDED JUNE 30, 2012

Revenue. Revenue increased 15% to $45.8 million for the second quarter of 2013, up from $40.0 million for the second quarter of 2012.  This increase reflects an 8% increase in T&D revenue and a 76% increase in transportation service revenue compared to the second quarter of 2012. The increase in transportation service revenue reflects more Event Business projects utilizing the Company’s transportation and logistics services.

During the second quarter of 2013, we disposed of 253,000 tons of hazardous and radioactive waste, down 3% from 261,000 tons disposed in the second quarter of 2012. Average selling price increased 13% during the second quarter of 2013 compared to the same quarter last year, reflecting a more favorable service mix.

US Ecology Michigan, which was acquired on May 31, 2012, contributed $3.4 million of total revenue during the second quarter of 2013, compared with $1.1 million in the second quarter of 2012.  Revenue from US Ecology Michigan is excluded from quarterly percentages of Base and Event Business and customer category information in the following paragraphs.

During the second quarter of 2013, T&D revenue from recurring Base Business customers increased 5% compared to the second quarter of 2012 and comprised 63% of T&D revenue. This compared to 64% of T&D revenue in the second quarter of 2012. As discussed further below, the increase in Base Business T&D revenue compared to the prior year primarily reflects higher T&D revenue from our broker and refinery Base Business customer categories, partially offset by lower T&D revenue from our “other industry” Base Business customer category.

Event Business revenue in the second quarter of 2013 increased 7% as compared to the same quarter in 2012 and was 37% of T&D revenue for the second quarter of 2013. This compared to 36% of T&D revenue in the second quarter of 2012. As discussed further below, the increase in Event Business T&D revenue compared to the prior year primarily reflects higher T&D revenue from our private clean-up and refinery Event Business customer categories, partially offset by lower T&D revenue from our government and broker Event Business customer categories.

The following table summarizes our T&D revenue growth (both Base and Event Business) by customer category for the second quarter of 2013 compared to the second quarter of 2012.

	Treatment and Disposal Revenue Growth Three Months Ended June 30, 2013 vs. Three Months Ended June 30, 2012
Private clean-up	113	%
Refinery	75	%
Rate regulated	4	%
Broker	2	%
Other industry	-7	%
Government	-49	%

21

T&D revenue from private clean-up projects increased 113% in the second quarter of 2013 compared to the second quarter of 2012.  This increase primarily reflects revenue from a closed nuclear fuel fabrication facility decommissioning project and an east coast clean-up project.

T&D revenue from our refinery customers increased 75% in the second quarter of 2013 compared to the second quarter of 2012. This increase primarily reflects higher disposal volumes and improved pricing on thermal recycling projects sourced directly from refinery customers.

Rate-regulated business at our Richland, Washington low-level radioactive waste disposal facility increased 4% in the second quarter of 2013 compared to the second quarter of 2012. Our Richland facility operates under a State-approved annual revenue requirement. The increase reflects the timing of revenue recognition for the rate-regulated portion of the business.

Our broker business increased 2% in the second quarter of 2013 compared to the second quarter of 2012. This increase was the result of shipments across the broad range of government and industry waste generators directly served by multiple broker customers, partially offset by lower volumes of brokered thermal recycling projects.

Our other industry revenue category decreased 7% in the second quarter of 2013 compared to the second quarter of 2012 as a result of reduced shipments from this broadly diverse industrial customer category.

Government clean-up business revenue decreased 49% in the second quarter of 2013 compared to the second quarter of 2012 due to reduced shipments from the U.S. Army Corps of Engineers (“USACE”). Event Business under our USACE contract contributed $1.4 million, or 3%, of total revenue in the second quarter of 2013 compared to $3.6 million, or 9%, of total revenue in the second quarter of 2012. Excluding transportation service revenue, T&D revenue with the USACE decreased approximately 62% in the second quarter of 2013 compared with the second quarter of 2012. This decrease was due to project-specific timing at multiple USACE clean-up sites and ongoing federal spending reductions. No USACE projects served by the Company were cancelled or, to our knowledge, awarded to competitors during the quarter. In May 2013, the Company received notice from USACE that they intend to exercise the two-year option on our base contract originally expiring in 2013.

Gross Profit. Gross profit for the second quarter of 2013 increased 9% to $18.9 million, up from $17.3 million in the second quarter of 2012. This increase primarily reflects a higher average selling price in the second quarter of 2013 compared to the second quarter of 2012. Gross margin was 41% in the second quarter of 2013, down from 43% in the second quarter of 2012. T&D gross margin was 49% in the second quarter of 2013 compared to 48% in the second quarter of 2012. The increase in T&D gross margin primarily reflects a more favorable service mix in the second quarter of 2013 compared to the second quarter of 2012.

Selling, General and Administrative (“SG&A”). SG&A expenses increased to $6.5 million, or 14% of total revenue, in the second quarter of 2013 compared with $6.4 million, or 16% of total revenue, in the second quarter of 2012. The increase primarily reflects higher payroll expenses, a contingency accrual associated with the U.S. EPA matter at our Robstown, Texas facility (refer to Note 11) and a full quarter of SG&A expenses related to Michigan operations in 2013, partially offset by lower variable incentive compensation and business development expenses.

Interest expense. Interest expense in the second quarter of 2013 was $222,000, up from $204,000 in the second quarter of 2012, primarily reflecting higher average debt levels in the second quarter of 2013.

Foreign Currency Gain (Loss). We recognized a $1.2 million non-cash foreign currency loss in the second quarter of 2013 compared with a $921,000 non-cash foreign currency loss in the second quarter of 2012. Foreign currency gains and losses reflect changes in business activity conducted in a currency other than the United States dollar (“USD”), our functional currency. Our Stablex facility is owned by our Canadian subsidiary, whose functional currency is the Canadian dollar (“CAD”). As part of our treasury management strategy we established intercompany loans between our parent company, US Ecology, and Stablex. These intercompany loans are payable by Stablex to US Ecology in CAD requiring us to revalue the outstanding loan balance through our statements of operations based on USD/CAD currency movements from period to period. At June 30, 2013, we had $42.8 million of intercompany loans subject to currency revaluation.

Other income. Other income includes non-operating business activities and unusual revenue and expenses. Other income in the second quarter of 2013 was $94,000, down from $522,000 in the second quarter of 2012. The decrease primarily reflects $474,000 of other income recorded in connection with the sale of an excess water right at our Grand View, Idaho property during the second quarter of 2012.

Income tax expense.  Our effective tax rate for the second quarter of 2013 was 35.0%, down from 38.6% in the second quarter of 2012. This decrease reflects a higher proportion of earnings from our Canadian operations, which are taxed at a lower corporate tax rate, partially offset by higher U.S. state income taxes. As of June 30, 2013 we had unrecognized tax benefits of $438,000 that, if recognized would favorably affect the effective tax rate.  As of June 30, 2013, we have recorded $36,000 of cumulative interest expense associated with this unrecognized tax benefit. We expect our full year effective income tax rate to be between 36.0% and 37.0%.

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SIX MONTHS ENDED JUNE 30, 2013 COMPARED TO SIX MONTHS ENDED JUNE 30, 2012

Revenue. Revenue increased 21% to $88.7 million for the first six months of 2013, up from $73.0 million for the first six months of 2012.  This increase reflects a 14% increase in T&D revenue and a 92% increase in transportation service revenue compared to the first six months of 2012. The increase in transportation service revenue reflects more Event Business projects utilizing the Company’s transportation and logistics services.

We disposed of 476,000 tons of hazardous and radioactive waste during both the first six months of 2013 and 2012.  Average selling price increased 15% during the first six months of 2013 compared to the first six months of 2012, reflecting a higher proportion of treated waste in the first six months of 2013.

US Ecology Michigan, which was acquired on May 31, 2012, contributed $6.2 million of total revenue during the first six months of 2013, compared with $1.1 million in the second quarter of 2012. Revenue from US Ecology Michigan is excluded from quarterly percentages of Base and Event Business and customer category information in the following paragraphs.

During the first six months of 2013, T&D revenue from recurring Base Business customers increased 1% compared to the first six months of 2012 and comprised 63% of T&D revenue. This compared to 68% of T&D revenue in the first six months of 2012. As discussed further below, the increase in Base Business T&D revenue compared to the prior year primarily reflects higher T&D revenue from our broker and refinery Base Business customer categories, partially offset by lower T&D revenue from our “other industry” and governmental Base Business customer categories.

Event Business revenue in the first six months of 2013 increased 25% compared to the first six months in 2012 and was 37% of T&D revenue for the first six months of 2013. This compared to 32% of T&D revenue in the first six months of 2012. As discussed further below, the increase in Event Business T&D revenue compared to the prior year primarily reflects higher T&D revenue from our private clean-up and refinery Event Business customer categories, partially offset by lower T&D revenue from our government Event Business customer category.

The following table summarizes our T&D revenue growth (both Base and Event Business) by customer category for the first six months of 2013 compared to the first six months of 2012.

	Treatment and Disposal Revenue Growth Six Months Ended June 30, 2013 vs. Six Months Ended June 30, 2012
Private clean-up	121	%
Refinery	51	%
Rate regulated	9	%
Broker	5	%
Other industry	-9	%
Government	-30	%

T&D revenue from private clean-up projects increased 121% in the first six months of 2013 compared to the first six months of 2012.  This increase primarily reflects revenue from a closed nuclear fuel fabrication facility decommissioning project and an east coast clean-up project.

T&D revenue from our refinery customers increased 51% in the first six months of 2013 compared to the first six months of 2012. This increase primarily reflects higher disposal volumes and improved pricing on thermal recycling projects sourced directly from refinery customers.

Rate-regulated business at our Richland, Washington low-level radioactive waste disposal facility increased 9% in the first six months of 2013 compared to the first six months of 2012. Our Richland facility operates under a State-approved annual revenue requirement. The increase reflects the timing of revenue recognition for the rate-regulated portion of the business.

Our broker business increased 5% in the first six months of 2013 compared to the first six months of 2012. This increase was the result of shipments across the broad range of government and industry waste generators directly served by multiple broker customers, partially offset by lower volumes of brokered thermal recycling projects.

Our other industry revenue category decreased 9% in the first six months of 2013 compared to the first six months of 2012 as a result of reduced shipments from this broadly diverse industrial customer category.

Government clean-up business revenue decreased 30% in the first six months of 2013 compared to the first six months of 2012 due to reduced shipments from USACE. Event Business under our USACE contract contributed $3.1 million, or 4%, of total revenue in the first six months of 2013 compared to $5.2 million, or 7%, of total revenue in the first six months of 2012. Excluding transportation service revenue, T&D revenue with the USACE decreased approximately 40% in the first six months of 2013 compared with the first six months of 2012. This decrease was due to project-specific timing at multiple USACE clean-up sites and ongoing federal spending reductions. No USACE projects served by the Company were cancelled or, to our knowledge, awarded to competitors during the first six months of 2013.

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Gross Profit. Gross profit for the first six months of 2013 increased 17% to $34.3 million, up from $29.4 million in the first six months of 2012. This increase primarily reflects a higher average selling price in the first six months of 2013 compared to the first six months of 2012. Gross margin was 39% in the first six months of 2013, down from 40% in the first six months of 2012. T&D gross margin was 46% in the first six months of 2013 compared to 45% in the first six months of 2012. The increase in T&D gross margin primarily reflects a more favorable service mix in the first six months of 2013 compared to the first six months of 2012.

Selling, General and Administrative. SG&A expenses increased to $12.2 million, or 14% of total revenue, in the first six months of 2013, compared with $12.0 million, or 16% of total revenue, in the first six months of 2012. The increase primarily reflects a full six months of SG&A expenses related to Michigan operations in 2013, higher payroll expenses and a contingency accrual associated with the U.S. EPA matter at our Robstown, Texas facility (refer to Note 11), partially offset by lower variable incentive compensation and business development expenses.

Interest expense. Interest expense in the first six months of 2013 was $443,000, up from $428,000 in the first six months of 2012, primarily reflecting higher average debt levels in the first six months of 2013.

Foreign Currency Gain (Loss). We recognized $2.1 million non-cash foreign currency loss in the first six months of 2013 compared with a $170,000 non-cash foreign currency gain in the first six months of 2012. Foreign currency gains and losses reflect changes in business activity conducted in a currency other than the USD, our functional currency. Our Stablex facility is owned by our Canadian subsidiary, whose functional currency is the CAD. As part of our treasury management strategy we established intercompany loans between our parent company, US Ecology, and Stablex. These intercompany loans are payable by Stablex to US Ecology in CAD requiring us to revalue the outstanding loan balance through our statements of operations based on USD/CAD currency movements from period to period.

Other income. Other income includes non-operating business activities and unusual revenue and expenses. Other income in the first six months of 2013 was $191,000, down from $602,000 in the first six months of 2012. The decrease primarily reflects $474,000 of other income recorded in connection with the sale of an excess water right at our Grand View, Idaho property during the second quarter of 2012.

Income tax expense.  Our effective tax rate for the first six months of 2013 was 35.9%, down from 38.8% in the first six months of 2012. This decrease reflects a higher proportion of earnings from our Canadian operations, which are taxed at a lower corporate tax rate, partially offset by higher U.S. state income taxes. As of June 30, 2013 we had unrecognized tax benefits of $438,000 that, if recognized would favorably affect the effective tax rate.  As of June 30, 2013, we have recorded $36,000 of cumulative interest expense associated with this unrecognized tax benefit.

CRITICAL ACCOUNTING POLICIES

Financial statement preparation requires management to make estimates and judgments that affect reported assets, liabilities, revenue and expenses and disclosure of contingent assets and liabilities. The accompanying unaudited consolidated financial statements are prepared using the same critical accounting policies disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

LIQUIDITY AND CAPITAL RESOURCES

Our primary sources of liquidity are cash and cash equivalents, cash generated from operations and borrowings under the Credit Agreement. At June 30, 2013, we had $4.0 million in cash and cash equivalents immediately available for operations. We assess our liquidity in terms of our ability to generate cash to fund our operating, investing, and financing activities. Our primary ongoing cash requirements are funding operations, capital expenditures, interest, and principal payments and paying declared dividends pursuant to our dividend policy. We believe future operating cash flows will be sufficient to meet our future operating, investing and dividend cash needs for the foreseeable future. Furthermore, existing cash balances and availability of additional borrowings under our Credit Agreement provide additional sources of liquidity should they be required.

Operating Activities. For the six months ended June 30, 2013, net cash provided by operating activities was $17.7 million. This primarily reflects net income of $12.6 million, non-cash depreciation, amortization and accretion of $8.4 million and unrealized non-cash foreign currency losses of $2.4 million, partially offset by a decrease in accrued salaries and benefits of $2.4 million, a decrease in deferred income taxes of $1.7 million and a decrease in other working capital of $2.1 million. Impacts on net income are due to the factors discussed above under Results of Operations.  The decrease in accrued salaries and benefits is primarily attributable to cash payments during 2013 for accrued fiscal year 2012 incentive compensation.

Days sales outstanding were 67 days as of June 30, 2013, compared to 61 days at December 31, 2012 and 68 days at June 30, 2012.

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For the six months ended June 30, 2012, net cash provided by operating activities was $15.6 million. This primarily reflects net income of $10.9 million and depreciation and amortization and accretion of $8.2 million, partially offset by a decrease in accounts payable and accrued liabilities of $3.7 million.  Impacts on net income are due to the factors discussed above under Results of Operations.  The decrease in accounts payable and accrued liabilities is primarily attributable to the payment of fiscal 2011 accrued customer refunds related to our rate-regulated business in Richland, Washington.

Investing Activities. For the six months ended June 30, 2013, net cash used in investing activities was $12.5 million, primarily related to capital expenditures. Significant capital projects included the purchase of land for future site development at our Robstown, Texas location, relocation of administrative offices at our Beatty, Nevada location to accommodate disposal capacity expansion, construction of additional disposal capacity at our Blainville, Quebec, Canada location and equipment purchases and infrastructure upgrades at all of our operating disposal facilities.

For the six months ended June 30, 2012, net cash used in investing activities was $16.8 million, primarily related to our acquisition of US Ecology Michigan for $11.2 million, net of cash acquired, and capital expenditures of $5.7 million.  Significant capital projects included construction of additional disposal capacity at our Grand View, Idaho and Blainville, Quebec, Canada locations and equipment purchases at our operating disposal facilities.

Financing Activities. For the six months ended June 30, 2013, net cash used in financing activities was $3.1 million, consisting primarily of $3.3 million of dividend payments to our stockholders and $2.0 million of net repayments under the Credit Agreement, partially offset by $2.1 million of proceeds from stock option exercises.

For the six months ended June 30, 2012, net cash provided by financing activities was $2.7 million, consisting primarily of $22.0 million of borrowings under the Credit Agreement incurred primarily to finance the US Ecology Michigan acquisition, partially offset by repayments under the Credit Agreement of $12.5 million and $6.6 million of dividend payments to our stockholders.

CONTRACTUAL OBLIGATIONS AND GUARANTEES

In May 2013, we executed a new lease for corporate office space in Boise, Idaho.  Future minimum lease payments on this non-cancelable operating lease as of June 30, 2013 consisted of the following:

$s in thousands	Payments
2013	$	34
2014	245
2015	301
2016	310
2017	318
Thereafter	382
	$	1,590

There were no other material changes in the amounts of our contractual obligations and guarantees during the six months ended June 30, 2013. For detailed information on our contractual obligations and guarantees, refer to our Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to changes in interest rates as a result of our borrowings under the Credit Agreement with Wells Fargo. Under the Credit Agreement, revolving loans are available based on the Prime Rate or LIBOR, at the Company’s option, plus an applicable margin determined according to a pricing grid under which the interest rate decreases or increases based on our ratio of funded debt to EBITDA. At June 30, 2013, we had $43.0 million of borrowings on the Reducing Revolving Line of Credit bearing an interest rate of 1.44%.  If interest rates were to rise, we would be subject to higher interest payments if outstanding balances remain unchanged. Based on the outstanding indebtedness of $43.0 million under our Credit Agreement at June 30, 2013, if market rates used to calculate interest expense were to average 1% higher in the next twelve months, our interest expense would increase by approximately $430,000.

Foreign Currency Risk

We are subject to currency exposures and volatility because of currency fluctuations. The majority of our transactions are in USD; however, our Stablex subsidiary conducts business in both Canada and the United States. In addition, contracts for services Stablex provides to U.S. customers are generally denominated in USD. During the six months ended June 30, 2013, Stablex transacted approximately 60% of its revenue in USD and at any time has cash on deposit in USD and outstanding USD trade receivables and payables related to these transactions. These USD cash, receivable and payable accounts are subject to non-cash foreign currency translation gains or losses. Exchange rate movements also affect the translation of Canadian generated profits and losses into USD.

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We established intercompany loans between Stablex and US Ecology, Inc. as part of a tax and treasury management strategy allowing for repayment of third-party bank debt used to complete the acquisition.  These intercompany loans are payable using CAD and are subject to mark-to-market adjustments with movements in the CAD. At June 30, 2013, we had $42.8 million of intercompany loans outstanding between Stablex and US Ecology. During the six months ended June 30, 2013, the CAD weakened as compared to the USD resulting in a $2.6 million non-cash foreign currency translation loss being recognized in the Company’s Consolidated Statement of Operations related to the intercompany loans.  Based on intercompany balances as of June 30, 2013, a $0.01 CAD increase or decrease in currency rate compared to the USD at June 30, 2013 would have generated a gain or loss of approximately $428,000 for the six months ended June 30, 2013.

We had total pre-tax foreign currency losses of $1.2 million and $2.1 million for the three and six months ended June 30, 2013, respectively.  We currently have no foreign exchange contracts, option contracts or other foreign currency hedging arrangements. Management evaluates the Company’s risk position on an ongoing basis to determine whether foreign exchange hedging strategies should be employed.

ITEM 4.CONTROLS AND PROCEDURES

Management of the Company, including the Chief Executive Officer and the Chief Financial Officer of the Company, have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of June 30, 2013. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures, including the accumulation and communication of disclosures to the Company’s Chief Executive Officer and Chief Financial Officer as appropriate to allow timely decisions regarding required disclosure, are effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the rules and forms of the SEC.

There were no changes in our internal control over financial reporting that occurred during the most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Cautionary Statement for Purposes of “Safe Harbor Provisions” of the Private Securities Litigation Reform Act of 1995

This quarterly report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws. Statements that are not historical facts, including statements about the Company’s beliefs and expectations, are forward-looking statements. Forward-looking statements include statements preceded by, followed by or that include the words “may,” “could,” “would,” “should,” “believe,” “expect,” “anticipate,” “plan,” “estimate,” “target,” “project,” “intend” and similar expressions. These statements include, among others, statements regarding our financial and operating results, strategic objectives and means to achieve those objectives, the amount and timing of capital expenditures, repurchases of its stock under approved stock repurchase plans, the amount and timing of interest expense, the likelihood of our success in expanding our business, financing plans, budgets, working capital needs and sources of liquidity.

Forward-looking statements are only predictions and are not guarantees of performance. These statements are based on management’s beliefs and assumptions, which in turn are based on currently available information. Important assumptions include, among others, those regarding demand for Company services, expansion of service offerings geographically or through new or expanded service lines, the timing and cost of planned capital expenditures, competitive conditions and general economic conditions. These assumptions could prove inaccurate. Forward-looking statements also involve known and unknown risks and uncertainties, which could cause actual results to differ materially from those contained in any forward-looking statement. Many of these factors are beyond our ability to control or predict. Such factors include the replacement of non-recurring event clean-up projects, a loss of a major customer, our ability to permit and contract for timely construction of new or expanded disposal cells, our ability to renew our operating permits or lease agreements with regulatory bodies, loss of key personnel, compliance with and changes to applicable laws, rules, or regulations, fluctuations in foreign currency markets, access to insurance, surety bonds and other financial assurances, a deterioration in our labor relations or labor disputes, our ability to perform under required contracts, failure to realize anticipated benefits and operational performance from acquired operations, adverse economic conditions, government funding or competitive pressures, incidents or adverse weather conditions that could limit or suspend specific operations, access to cost effective transportation services, lawsuits, market conditions, our willingness or ability to pay dividends, implementation of new technologies and our ability to effectively close and  integrate future acquisitions.

Except as required by applicable law, including the securities laws of the United States and the rules and regulations of the Securities and Exchange Commission (the “SEC”), we are under no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on our forward-looking statements. Although we believe that the expectations reflected in forward-looking statements are reasonable, we cannot guarantee future results or performance. Before you invest in our common stock, you should be aware that the occurrence of the events described in the “Risk Factors” section in this report could harm our business, prospects, operating results, and financial condition.

Investors should also be aware that while we do, from time to time, communicate with securities analysts, it is against our policy to disclose to them any material non-public information or other confidential commercial information. Accordingly, stockholders should not assume that we agree with any statement or report issued by any analyst irrespective of the content of the statement or report. Furthermore, we have a policy against issuing or confirming financial forecasts or projections issued by others. Thus, to the extent that reports issued by securities analysts contain any projections, forecasts or opinions, such reports are not the responsibility of US Ecology, Inc.

ITEM 1.LEGAL PROCEEDINGS

In 2012, we settled allegations by the United States Environment Protection Agency (“U.S. EPA”) that the thermal recycling operation at our Robstown, Texas facility did not comply with certain rules and regulations of the Resource Conservation and Recovery Act of 1976 (“RCRA”). As part of the settlement, we agreed to pay a civil penalty and to submit an application to the State of Texas for a RCRA subpart X permit.  The Company and the thermal recycling unit’s owner-operator also agreed to a set of interim operating conditions that allow the facility to continue providing recycling services to customers until the RCRA Subpart X permit is issued.

In connection with this matter, in June 2013 the U.S. EPA asserted various related technical compliance and permitting violations of the Clean Air Act of 1970. Although negotiations on the merits of a proposed settlement are ongoing with the U.S. EPA, we recognized a charge of $238,000 during the second quarter of 2013 in Selling, general and administrative expenses in the Consolidated Statement of Operations related to this matter.

Other than as disclosed above, we are not currently a party to any material pending legal proceedings and are not aware of any other claims that could have a materially adverse effect on our financial position, results of operations or cash flows.

ITEM 1A.RISK FACTORS

There have been no material changes in our risk factors from those disclosed in Item 1A of Part I of our Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

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ITEM 3.DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.OTHER INFORMATION

None.

ITEM 6.EXHIBITS

10.63	Management Incentive Plan (Executive) Effective January 1, 2013*
10.64	Executive Sales Incentive Plan Effective January 1, 2013*
15	Letter re: Unaudited Interim Financial Statements
31.1	Certification of CEO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of CFO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	The following materials from the quarterly report on Form 10-Q of US Ecology, Inc. for the quarter ended June 30, 2013 formatted in Extensible Business Reporting Language (XBRL) include: (i) Unaudited Consolidated Balance Sheets, (ii) Unaudited Consolidated Statements of Operations, (iii) Unaudited Consolidated Statements of Comprehensive Income, (iv) Unaudited Consolidated Statements of Cash Flows, and (v) Notes to the Unaudited Consolidated Financial Statements

* Identifies management contracts or compensatory plans or arrangements required to be filed as an exhibit hereto.

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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.

	US Ecology, Inc.
	(Registrant)
Date: August 1, 2013	/s/ Eric L. Gerratt
	Eric L. Gerratt Executive Vice President, Chief Financial Officer and Treasurer

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EX-10.63

EXHIBIT 10.63

2013 MANAGEMENT INCENTIVE PLAN

(EXECUTIVE)

I.PURPOSE

The US Ecology, Inc. 2013 Management Incentive Plan (Executive) (“Plan”) provides a variable component of compensation for US Ecology, Inc. (“Company”) executives for achievement of objectives set by the Company’s Board of Directors (“Board”) during calendar year 2013 (“Plan Year”).  The Plan is designed to align the interests of executives with those of stockholders and attract, motivate and retain management critical to the long-term success of the Company.

II.ADMINISTRATION

The administrator of the Plan shall be the Board’s Compensation Committee (“Administrator”).  The Administrator, or its designee, shall have full power, discretion and authority to, among other things, interpret the Plan, verify all amounts paid under the Plan, and establish rules and procedures for its administration, as deemed necessary and appropriate.  The Administrator may rely on opinions, reports or statements of the Company’s officers, public accountants and other professionals.  The calculation of any amounts to be paid under the Plan shall be performed by the Company’s Chief Financial Officer and submitted by the Company’s President to the Administrator for approval.  Any interpretation of the Plan or act of the Administrator, or its designee, in administering the Plan, shall be final and binding.

No member of the Board shall be liable for any action, interpretation or construction made in good faith with respect to the Plan.  The Company shall indemnify, to the fullest extent permitted by law, each member of its Board who may become liable in any civil action or proceeding with respect to decisions made relating to the Plan.

III.ELIGIBILITY

Eligibility to participate in the Plan is limited to designated executives of the Company (each a “Participant”) as approved by the Administrator or the Board and shall be evidenced by a letter from the President (“Participant Letter”).

To be eligible to receive an award under the Plan, a Participant must have been employed by the Company (i) on a full-time basis during the Plan Year and (ii) on the date of any payment under the Plan, except as otherwise provided for in this Plan or when such requirement is waived by the Administrator.

a.New Hire/Rehire — A Participant whose employment with the Company began during the Plan Year shall be eligible for an award on a pro-rata basis, provided the Administrator has approved participation and other conditions of the Plan are satisfied.  An award will be pro-rated based upon the number of calendar days the Participant was employed in an eligible position during the Plan Year.  In the case of rehires, there shall be no credit for prior service, unless otherwise approved in writing by the Administrator.

b.Leave of Absence — A Participant who is absent from full-time employment with the Company for more than thirteen (13) consecutive weeks of the Plan Year shall not be eligible for payment under the Plan, unless the Administrator approves participation in writing.

c.Promotion — If a Participant is promoted to an eligible position or from one eligible position to another eligible position (with a higher award potential) during the Plan Year, a pro-rated award will be calculated by factoring the number of calendar days in each eligible position and considering the Target Incentive, Plan Objectives, metrics and weights applicable during the Participant’s tenure in each position.

d.Demotion — If a Participant is demoted from an eligible position during the Plan Year, such Participant shall be deemed ineligible for receipt of any payments under the Plan, unless otherwise approved in writing by the Administrator.

e.Removal from Plan — A Participant may be removed from the Plan or an award adjusted, including elimination of any right to an award under the Plan, for insubordination, misconduct, malfeasance, or any formal disciplinary action taken by the Company during the Plan Year or prior to payment.

f.Termination Without Cause by Company/With Good Reason by Participant — In the event a Participant is terminated without cause by the Company or for good reason by the Participant, as defined in the Participant’s employment agreement, any amount that would have been due the Participant absent his/her termination shall be paid on a pro-rata basis based on the number of calendar days the Participant was employed during the Plan Year.  Payment shall be made  according to the terms of the Plan and the requirement that the Participant be an employee on that date of payment shall be waived.

IV.INCENTIVE AWARD

The Board shall establish the objectives (each a “Plan Objective”) that must be achieved for a Participant to receive payment of all or a portion of his/her target incentive amount, which amount is the product of the Participant’s annual salary and an established percentage (“Target Incentive”), also established by the Board.

Payments under the Plan, if any, shall be made to a Participant upon certification by the President that such payments are authorized by the Administrator and all applicable criteria have been satisfied.  Payments shall be made as soon as practicable after approval and availability of the Company’s final audited Plan Year financial statements, but in any event will be made by March 15, 2014.

V.PLAN OBJECTIVES

Plan Objectives fall into one of three categories:  a) Financial (80% of Target Incentive), b) Health and Safety (10% of Target Incentive), and c) Compliance (10% of Target Incentive).  Plan Objectives are independent and mutually exclusive from each other, so that the applicable percentage of the Target Incentive may be earned if one Plan Objective is met, even if the threshold performance is not met for another Plan Objective.

a.Financial — The Financial Plan Objective is based on the Plan Year’s actual consolidated operating income before Plan expenses. The target amount is set and approved by the Board (“Operating Income Target”).  Achievement will be determined by comparing the Plan Year’s actual financial results (based on audited financial information) to the Operating Income Target.  Achievement of the Operating Income Target will be weighted at 80% of a Participant’s Target Incentive.

The Administrator, in its sole discretion, may include or exclude certain non-recurring or special transactions from calculated operating income for purposes of determining the amount of an award under the Plan.

The portion of a Participant’s Target Incentive he or she may receive based on operating income results (“Finance Target Incentive”) is scalable. For every percentage point achievement over 89% of the Operating Income Target, up to and including 100% (rounded to the nearest percentage), a Participant shall earn 9.09% of the respective Finance Target Incentive.  Upon 100% achievement of the Operating Income Target, 100% of the respective Finance Target Incentive shall be available to a Participant.

If the Operating Income Target is exceeded, a Participant shall be eligible for an additional amount, calculated by multiplying the Participant’s annual salary by 1.25% (“Excess Percentage”) for every 1%, or fraction thereof, over the Operating Income Target and the resulting product by the respective Operating Income Target weight (“Additional Finance Incentive”). The Additional Finance Incentive is capped at one times the Participant’s Target Incentive.

By way of example only, a Participant with an annual base salary of $200,000 who has a Target Incentive of 40% would receive the following amounts based on various levels of achievement.

EXAMPLE

OPERATING INCOME TARGET

(WEIGHTED 80% OF TARGET INCENTIVE)

Achievement		% of Award		Cumulative		Payout		Achievement		% of Award		Cumulative		Payout
89	%	0	%	0	%	$	0	95	%	9.09	%	54.54	%	$	34,906
90	%	9.09	%	9.09	%	$	5,818	96	%	9.09	%	63.63	%	$	40,723
91	%	9.09	%	18.18	%	$	11,635	97	%	9.09	%	72.72	%	$	46,541
92	%	9.09	%	27.27	%	$	17,453	98	%	9.09	%	81.81	%	$	52,358
93	%	9.09	%	36.36	%	$	23,270	99	%	9.09	%	90.90	%	$	58,176
94	%	9.09	%	45.45	%	$	29,088	100	%	9.10	%	100.00	%	$	64,000

Assuming 95% achievement of the Operating Income Target, the Participant in this example would be entitled to $34,906, calculated as follows:

	OPERATING INCOME TARGET
Annual Salary	$	200,000
Target Incentive	X 40		%
Target Incentive Award	$	80,000
Financial Objective Weight	X 80		%
Weighted Target Incentive Award	$	64,000
Cumulative Award Percent Earned	X 54.54		%
Earned Award	$	34,906

Assuming instead a 105% achievement of the Operating Income Target, the Participant would be entitled to $74,000, calculated as follows:

	OPERATING INCOME TARGET
Annual Salary	$	200,000
Target Incentive	X 40		%
Target Incentive Award	$	80,000
Financial Objective Weight	X 80		%
Weighted Target Incentive Award	$	64,000
Cumulative Award Percent Earned	X 100		%
Earned Award	$	64,000

	ADDITIONAL FINANCE INCENTIVE
Annual Salary	$	200,000
Cumulative Excess Percentage (5 X 1.25%)	X 6.25		%
Additional Finance Incentive Award	$	12,500
Financial Objective Weight	X 80		%
Weighted Additional Finance Incentive Award	$	10,000
Finance Target Incentive	$	64,000
Additional Finance Incentive	$	10,000
Earned Award	$	74,000

Assuming instead a 145% achievement of the Operating Income Target, the Participant would be entitled to an Additional Finance Incentive of $80,000 and a total earned amount of $144,000, calculated as follows:

	ADDITIONAL FINANCE INCENTIVE
Annual Salary	$	200,000
Cumulative Excess Percentage (45 X 1.25%)	X 56.25		%
Additional Finance Incentive Award	$	112,500
Financial Objective Weight	X 80		%
Weighted Additional Finance Incentive Award (Before Cap)	$	90,000
Additional Finance Incentive Award Cap (.40 x $200,000)	$	(80,000	)
Excess Additional Finance Incentive Award Disallowed	$	10,000
Finance Target Incentive	$	64,000
Additional Finance Incentive	$	80,000
Earned Award	$	144,000

b.Health and Safety - The metrics for this Plan Objective are identified below and are weighted cumulatively at 10% of a Participant’s Target Incentive and individually at 2%.  Each metric is independent and mutually exclusive from the other  metrics so that a percentage of the Target Incentive related to Health and Safety may be earned independent of achievement of any other Health and Safety metric or other Plan Objective.

i.Experience Modification Rating (“EMR”) (2.0% Weight) — The Target Incentive related to EMR shall be earned if the U.S. (1.0% Weight) and Stablex (1.0% Weight) metrics, as set and approved by the Board, are achieved as determined by the President and reviewed by the Administrator. One-half of the Target Incentive related to EMR (1.0%) may be earned if the U.S. or Stablex metric is achieved, even if the other is not achieved.

ii.OSHA Designation (2.0% Weight) — The Target Incentive related to OSHA designation shall be earned if each of the Company’s operating facilities maintains its OSHA designation (e.g. STAR and SHARP) or other specified designation as determined on December 31, 2012; or takes such action as is required to pursue such a designation.

iii.Total Case Rate (“TCR”) (2.0% Weight) — The Target Incentive related to TCR shall be earned if the Company-wide metric, as set and approved by the Board, is achieved as determined by the President and reviewed by the Administrator.

iv.Days Away Restricted Time (“DART”) (2.0% Weight) — The Target Incentive related to DART shall be earned if the Company-wide metric, as set and approved by the Board, is achieved as determined by the President and reviewed by the Administrator.

v.Lost Time Incident (“LTI”) (2.0% Weight) — The Target Incentive related to LTI shall be earned if the Company-wide metric, as set and approved by the Board, is achieved as determined by the President and reviewed by the Administrator.

c.Compliance — The metric for this Plan Objective is the avoidance of Notices of Violation or Enforcement with monetary penalties during the Plan Year and is weighted at 10% of a Participant’s Target Incentive.  The Target Incentive related to Compliance (“Compliance Target Incentive”) shall be earned based on a determination by the Administrator, taking into consideration, among other things, the dollar amount of a monetary penalty paid (or accrued under generally accepted accounting principles — “GAAP”) in the Plan Year, severity of the Notices of Violation or Enforcement, regulatory basis for penalty and respective fact patterns.  This metric is independent so that a percentage of the Compliance Target Incentive may be earned independent and mutually exclusive of achievement of any other Plan Objective.

The President will include in each Participant Letter the applicable Target Incentive, Plan Objectives, metrics, weights and such other information as may be determined.

VI.MISCELLANEOUS

a.Interests Not Transferable — Any interest of a Participant under the Plan may not be voluntarily sold, transferred, alienated, assigned or encumbered, other than by will or pursuant to the laws of descent and distribution.  Notwithstanding the foregoing, if a Participant dies during the Plan Year, or after the Plan Year and prior to payment of an award, then a pro-rata portion of the award to which the Participant would have been eligible absent death shall be paid to the deceased’s beneficiary, as designated in writing by such Participant (attached hereto as Exhibit A); provided however, that if the deceased Participant has not designated a beneficiary then such amount shall be payable to the deceased Participant’s estate.  Payment shall be based on the number of calendar days the Participant was employed in an eligible position during the Plan Year and shall be made at the time other Participants are paid. The requirement that the Participant be an employee on that date of payment shall be waived.

b.Withholding Taxes — The Company shall withhold from any amounts payable under the Plan applicable withholding including, but not limited to, federal, state, city and local taxes, FICA and Medicare as shall be legally required.  Additionally, the Company will withhold from any amounts payable under the Plan the applicable contribution for the Participant’s 401(k) Savings and Retirement Plan as defined in the US Ecology, Inc. 401(K) Plan description protected under ERISA.

c.No Right of Employment — Nothing in this Plan will be construed as creating any contract of employment or conferring upon any Participant any right to continue in the employ or other service of the Company or limit in any way the right of Company to change such person’s compensation or other benefits or to terminate the employment or other service of such person with or without cause.

d.No Representations — The Company does not represent or guarantee that any particular federal or state income, payroll, personal property or other tax consequence will result from participation in the Plan.

e.Section Headings — The section headings contained herein are for convenience only and, in the event of any conflict, the text of the Plan, rather than the section headings, will control.

f.Severability — In the event any provision of the Plan shall be held to be illegal or invalid for any reason, such illegality or invalidity shall not affect the remaining parts of the Plan and the Plan shall be construed and enforced as if such illegal or invalid provisions had never been contained in the Plan.

g.Invalidity — If any term or provision contained herein is to any extent invalid or unenforceable, such term or provision shall be reformed so that it is valid, and such invalidity or unenforceability  shall not affect any other provision or part hereof.

h.Amendment, Modification or Termination — The Administrator reserves the right to unilaterally amend, modify or terminate the Plan at any time as it deems necessary or advisable.

i.Applicable Law — Except to the extent superseded by the laws of the United States, the laws of the State of Idaho, without regard to its conflicts of laws principles, shall govern in all matters relating to the Plan.

j.Effect on Other Plans — Payments or benefits provided to a Participant under any stock, deferred compensation, savings, retirements or other employee benefit plan are governed solely by the terms of each of such plans.

k.Effective Date — The Plan is effective as of January 1, 2013.

EXHIBIT A

BENEFICIARY DESIGNATION

I hereby designate the following person or persons as Beneficiary to receive any management incentive payments due under the attached US Ecology, Inc. 2013 Management Incentive Plan (Executive), effective January 1, 2013, in the event of my death, reserving the full right to revoke or modify this designation, or any modification thereof, at any time by a further written designation:

Primary Beneficiary
Name of Individual	Relationship to me	Birth Date (if minor)
Address
Name of Trust	Date of Trust

Provided, however, that if such Primary Beneficiary shall not survive me by at least sixty (60) days, the following shall be the Beneficiary:

Contingent Beneficiary
Name of Individual	Relationship to me	Birth Date (if minor)
Address
Name of Trust	Date of Trust

This Beneficiary Designation shall not affect any other beneficiary designation form that I may have on file with US Ecology, Inc. regarding benefits other than that referred to above.

Date

Name

Signature

EX-10.64

EXHIBIT 10.64

2013 EXECUTIVE SALES INCENTIVE PLAN

I.PURPOSE

The US Ecology, Inc. 2013 Executive Sales Incentive Plan (“Plan”) provides a variable component of compensation for Senior Vice President of Sales and Marketing, Steven D. Welling (“Participant”), for achievement of objectives set by the US Ecology, Inc. (“Company”) Board of Directors (“Board”) during calendar year  2013  (“Plan Year”).  The Plan is designed to better align the interests of Participant with those of stockholders, better leverage Participant’s sales and leadership skills to improve the performance of individual sales team members and encourage greater sales force efficiency.

II.ADMINISTRATION

The administrator of the Plan shall be the Board’s Compensation Committee (“Administrator”).  The Administrator, or its designee, shall have full power, discretion and authority to, among other things, interpret the Plan, verify all amounts paid under the Plan and establish rules and procedures for its administration, as deemed necessary and appropriate.  The Administrator may rely on opinions, reports or statements of the Company’s officers, public accountants and other professionals.  The calculation of any amounts to be paid under the Plan shall be performed by the Company’s Chief Financial Officer and submitted by the Company’s President to the Administrator for approval.  Any interpretation of the Plan or act of the Administrator, or its designee, in administering the Plan, shall be final and binding.

No member of the Board shall be liable for any action, interpretation or construction made in good faith with respect to the Plan.  The Company shall indemnify, to the fullest extent permitted by law, each member of its Board who may become liable in any civil action or proceeding with respect to decisions made relating to the Plan.

III.ELIGIBILITY

To be eligible to receive an award under the Plan, Participant must have been employed by the Company (i) on a full-time basis during the Plan Year and (ii) on the date of any payment under the Plan, except as otherwise provided for in this Plan or when such requirement is waived by the Administrator.

a.Removal from Plan — Participant may be removed from the Plan or an award adjusted, including elimination of any right to an award under the Plan, for insubordination, misconduct, malfeasance, or any formal disciplinary action taken by the Company during the Plan Year or prior to payment.

b.Termination Without Cause by Company/With Good Reason by Participant — In the event Participant is terminated without cause by the Company or for good reason by the Participant, as defined in the Participant’s employment agreement, any amount that would have been due the Participant absent his/her termination shall be paid on a pro-rata basis based on the number of calendar days the Participant was employed during the Plan Year.  Payment shall be made according to the terms of the Plan and the requirement that the Participant be an employee on that date of payment shall be waived.

IV.INCENTIVE AWARD

The Board shall establish a Plan Year treatment and disposal revenue target (the “Plan Target).  The amount to which Participant may be entitled (“Incentive Payment”) is the product of the treatment and disposal revenue accrued in the Plan Year and a percentage rate(s) established by the Board (“Incentive Rate”).  Payments under the Plan, if any, shall be made to Participant upon certification by the President that such payments are authorized by the Administrator and all applicable criteria have been satisfied.  Payments shall be made as soon as practicable after approval and availability of the Company’s final audited Plan Year financial statements, but in any event will be made by March 15, 2014.

V.INCENTIVE AWARD DETERMINATION

Participant’s Incentive Payment shall be earned, beginning with achievement of 85% of the Plan Target and shall be capped at the level where Company-wide treatment and disposal revenue is equal to 105% of the Plan Target.  The Incentive Rates applied to actual treatment and disposal revenue will range from .03% to .50%, depending on the level of revenue.  The Plan Target, applicable Incentive Rates and the treatment and disposal revenue amounts to which each Incentive Rate applies shall be determined by the Board and shall be set forth in a letter from the President to Participant.  Treatment and disposal revenue generated by facilities acquired by the Company during the Plan Year shall be excluded from actual results.

By way of example only: Assuming a Plan Target of $100,000,000, the minimum amount upon which an Incentive Rate could be applied would be $85,000,000 ($100,000,000 X .85) and the maximum amount upon which an Incentive Rate could be applied would be $105,000,000 ($100,000,000 X 1.05).  Assuming actual treatment and disposal revenue for the Plan Year of $97,000,000, Participant, in this example, would be eligible for an Incentive Payment of $38,600.00, calculated from the table below:

Beginning of		% of Plan				% of Plan		Incentive		Incremental		Cumulative
Range		Target		End of Range		Target		Rate		$ Earned		$ Earned
$	85,000,000.00	85	%	$	92,000,000.00	92	%	0.03	%	$	27,600.00	$	27,600.00
$	92,000,000.01	92	%	$	95,000,000.00	95	%	0.20	%	$	6,000.00	$	33,600.00
$	95,000,000.01	95	%	$	97,000,000.00	97	%	0.25	%	$	5,000.00	$	38,600.00
$	97,000,000.01	97	%	$	100,000,000.00	100	%	0.30	%	$	9,000.00	$	47,600.00
$	100,000,000.01	100	%	$	101,000,000.00	101	%	0.40	%	$	4,000.00	$	51,600.00
$	101,000,000.01	101	%	$	102,000,000.00	102	%	0.45	%	$	4,500.00	$	56,100.00
$	102,000,000.01	102	%	$	104,000,000.00	104	%	0.50	%	$	10,000.00	$	66,100.00
$	104,000,000.01	104	%	$	105,000,000.00	105	%	0.50	%	$	5,000.00	$	71,100.00

Assuming instead treatment and disposal revenue for the Plan Year of $110,000,000, the Incentive Payment would be capped at $71,100 and Participant would not be credited for revenue exceeding the $105,000,000 ceiling.

VI.PLAN INCENTIVE ADJUSTMENTS

Once paid, no Incentive Payment shall be subject to refund or return based on aged accounts receivable or credit memos.  However, in calculating future payments under a similar plan, any receivables written off for which an Incentive Payment was previously made under the Plan may, at the Administrator’s discretion, be subtracted from revenues on a dollar-for-dollar basis.  Furthermore, the Company reserves the right to request and/or initiate the repayment of any overpayments at any time, for any reason.  Any overpayment must be repaid to the Company within six months of discovery and notification to Participant.

VII.MISCELLANEOUS

a.Interests Not Transferable — Any interest of Participant under the Plan may not be voluntarily sold, transferred, alienated, assigned or encumbered, other than by will or pursuant to the laws of descent and distribution.  Notwithstanding the foregoing, if Participant dies during the Plan Year, or after the Plan Year and prior to payment of an award, then a pro-rata portion of the award to which Participant would have been eligible absent death shall be paid to the deceased’s beneficiary, as designated in writing by Participant (attached hereto as Exhibit A); provided however, that if Participant has not designated a beneficiary then such amount shall be payable to Participant’s estate.  Payment shall be based on the number of calendar days Participant was employed in his position of Senior Vice President of Sales and Marketing during the Plan Year.  The requirement that Participant be an employee on the date of payment shall be waived.

b.Withholding Taxes — The Company shall withhold from any amounts payable under the Plan applicable withholding including, but not limited to, federal, state, city and local taxes, FICA and Medicare as shall be legally required.  Additionally, the Company will withhold from any amounts payable under the Plan the applicable contribution for Participant’s 401(k) Savings and Retirement Plan as defined in the US Ecology, Inc. 401(K) Plan description protected under ERISA.

c.No Right of Employment — Nothing in this Plan will be construed as creating any contract of employment or conferring upon Participant any right to continue in the employ or other service of the Company or limit in any way the right of Company to change Participant’s compensation or other benefits or to terminate his employment with or without cause.

d.No Representations — The Company does not represent or guarantee that any particular federal or state income, payroll, personal property or other tax consequence will result from participation in the Plan.

e.Section Headings — The section headings contained herein are for convenience only and, in the event of any conflict, the text of the Plan, rather than the section headings, will control.

f.Severability — In the event any provision of the Plan shall be held to be illegal or invalid for any reason, such illegality or invalidity shall not affect the remaining parts of the Plan and the Plan shall be construed and enforced as if such illegal or invalid provisions had never been contained in the Plan.

g.Invalidity — If any term or provision contained herein is to any extent invalid or unenforceable, such term or provision shall be reformed so that it is valid, and such invalidity or unenforceability  shall not affect any other provision or part hereof

h.Amendment, Modification or Termination — The Administrator reserves the right to unilaterally amend, modify or terminate the Plan at any time as it deems necessary or advisable.

i.Applicable Law — Except to the extent superseded by the laws of the United States, the laws of the State of Idaho, without regard to its conflicts of laws principles, shall govern in all matters relating to the Plan.

j.Effect on Other Plans — Payments or benefits provided to Participant under any stock, deferred compensation, savings, retirements or other employee benefit plan are governed solely by the terms of each of such plans.

k.Effective Date — The Plan is effective as of January 1, 2013.

EXHIBIT A

BENEFICIARY DESIGNATION

I hereby designate the following person or persons as Beneficiary to receive any management incentive payments due under the attached US Ecology, Inc. 2013 Executive Sales Incentive Plan effective January 1, 2013, in the event of my death, reserving the full right to revoke or modify this designation, or any modification thereof, at any time by a further written designation:

Primary Beneficiary
Name of Individual	Relationship to me	Birth Date (if minor)
Address
Name of Trust	Date of Trust

Provided, however, that if such Primary Beneficiary shall not survive me by at least sixty (60) days, the following shall be the Beneficiary:

Contingent Beneficiary
Name of Individual	Relationship to me	Birth Date (if minor)
Address
Name of Trust	Date of Trust

This Beneficiary Designation shall not affect any other beneficiary designation form that I may have on file with US Ecology, Inc. regarding benefits other than that referred to above.

Date

Name

Signature

EX-15

EXHIBIT 15

US Ecology, Inc.

Boise, ID

We have reviewed, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the unaudited interim financial information of US Ecology, Inc. and subsidiaries for the three-month and six-month periods ended June 30, 2013, and 2012, as indicated in our report dated August 1, 2013; because we did not perform an audit, we expressed no opinion on that information.

We are aware that our report referred to above, which is included in your Quarterly Report on Form 10-Q for the quarter ended June 30, 2013, is incorporated by reference in Registration Statement Nos. 333-157529, 333-68868, 333-93105, 333-140419, and 333-69863 on Form S-8, Registration Statement No. 333-187001 on Form S-3, and Registration Statement No. 333-187003 on Form S-4.

We also are aware that the aforementioned report, pursuant to Rule 436(c) under the Securities Act of 1933, is not considered a part of the Registration Statement prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of that Act.

/s/ Deloitte & Touche LLP

Boise, Idaho

August 1, 2013

EX-31.1

EXHIBIT 31.1

US ECOLOGY, INC.

CERTIFICATIONS PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

CERTIFICATION

I, Jeffrey R. Feeler, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of US Ecology, Inc.;

2.     Based on my knowledge, this 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 and 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 functions):

(a)   All significant deficiencies and material weaknesses in the design or operation of internal control 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 control over financial reporting.

Date: August 1, 2013	/s/ Jeffrey R. Feeler
	Jeffrey R. Feeler President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

US ECOLOGY, INC.

CERTIFICATIONS PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

CERTIFICATION

I, Eric L. Gerratt, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of US Ecology, Inc.;

2.     Based on my knowledge, this 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 and 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 functions):

(a)   All significant deficiencies and material weaknesses in the design or operation of internal control 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 control over financial reporting.

Date: August 1, 2013	/s/ Eric L. Gerratt
	Eric L. Gerratt Executive Vice President, Chief Financial Officer and Treasurer

EX-32

EXHIBIT 32

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 on Form 10-Q of US Ecology, Inc., (the “Company”) for the quarterly period ended June 30, 2013, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Jeffrey R. Feeler and Eric L. Gerratt, Chief Executive Officer and Chief Financial Officer, respectively, of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to our knowledge:

(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 the Company as of the dates and for the periods expressed in the Report.

Date: August 1, 2013	/s/ Jeffrey R. Feeler
	Jeffrey R. Feeler President and Chief Executive Officer
	/s/ Eric L. Gerratt
	Eric L. Gerratt Executive Vice President, Chief Financial Officer and Treasurer

XML

COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2013

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

NOTE 11. COMMITMENTS AND CONTINGENCIES

Litigation and Regulatory Proceedings

In the ordinary course of business, we are involved in judicial and administrative proceedings involving federal, state, provincial or local governmental authorities, including regulatory agencies that oversee and enforce compliance with permits. Fines or penalties may be assessed by our regulators for non-compliance.  Actions may also be brought by individuals or groups in connection with permitting of planned facilities, modification or alleged violations of existing permits, or alleged damages suffered from exposure to hazardous substances purportedly released from our operated sites, as well as other litigation. We maintain insurance intended to cover property and damage claims asserted as a result of our operations. Periodically, management reviews and may establish reserves for legal and administrative matters, or other fees expected to be incurred in relation to these matters.

In 2012, we settled allegations by the United States Environment Protection Agency (“U.S. EPA”) that the thermal recycling operation at our Robstown, Texas facility did not comply with certain rules and regulations of the Resource Conservation and Recovery Act of 1976 (“RCRA”). As part of the settlement, we agreed to pay a civil penalty and to submit an application to the State of Texas for a RCRA Subpart X permit.  The Company and the thermal recycling unit’s owner-operator also agreed to a set of interim operating conditions that allow the facility to continue providing recycling services to customers until the RCRA Subpart X permit is issued.

In connection with this matter, in June 2013 the U.S. EPA asserted various related technical compliance and permitting violations of the Clean Air Act of 1970. Negotiations on the merits of a proposed settlement are ongoing with the U.S. EPA. We recognized a charge of $238,000 during the second quarter of 2013 in Selling, general and administrative expenses in the Consolidated Statement of Operations related to this enforcement matter.

Other than as disclosed above, we are not currently a party to any material pending legal proceedings and are not aware of any other claims that could have a materially adverse effect on our financial position, results of operations or cash flows.

Operating Leases

In May 2013, we executed a new lease for corporate office space in Boise, Idaho.  Future minimum lease payments on this non-cancelable operating lease as of June 30, 2013 consisted of the following:

$s in thousands	Payments
2013	$	34
2014	245
2015	301
2016	310
2017	318
Thereafter	382
	$	1,590

XML

CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
CONSOLIDATED STATEMENTS OF OPERATIONS
Revenue	$ 45,777	$ 39,980	$ 88,676	$ 72,993
Direct operating costs	19,759	18,633	40,843	36,271
Transportation costs	7,090	4,021	13,523	7,320
Gross profit	18,928	17,326	34,310	29,402
Selling, general and administrative expenses	6,519	6,366	12,245	11,971
Operating income	12,409	10,960	22,065	17,431
Other income (expense):
Interest income	2	4	7	9
Interest expense	(222)	(204)	(443)	(428)
Foreign currency gain (loss)	(1,193)	(921)	(2,131)	170
Other	94	522	191	602
Total other income (expense)	(1,319)	(599)	(2,376)	353
Income before income taxes	11,090	10,361	19,689	17,784
Income tax expense	3,880	3,999	7,073	6,899
Net income	$ 7,210	$ 6,362	$ 12,616	$ 10,885
Earnings per share:
Basic (in dollars per share)	$ 0.39	$ 0.35	$ 0.69	$ 0.60
Diluted (in dollars per share)	$ 0.39	$ 0.35	$ 0.68	$ 0.60
Shares used in earnings per share calculation:
Basic (in shares)	18,401	18,228	18,362	18,223
Diluted (in shares)	18,483	18,264	18,446	18,259
Dividends paid per share (in dollars per share)	$ 0.18	$ 0.18	$ 0.18	$ 0.36

XML

RECEIVABLES

6 Months Ended

Jun. 30, 2013

RECEIVABLES

RECEIVABLES

NOTE 4. RECEIVABLES

Receivables consisted of the following:

	June 30,			December 31,
$s in thousands	2013			2012
Trade	$	33,014		$	32,787
Unbilled revenue	1,396			1,529
Other	289			99
Total receivables	34,699			34,415
Allowance for doubtful accounts	(464		)	(468		)
Receivables, net	$	34,235		$	33,947

XML

RECEIVABLES (Tables)

6 Months Ended

Jun. 30, 2013

RECEIVABLES

Schedule of receivables

	June 30,			December 31,
$s in thousands	2013			2012
Trade	$	33,014		$	32,787
Unbilled revenue	1,396			1,529
Other	289			99
Total receivables	34,699			34,415
Allowance for doubtful accounts	(464		)	(468		)
Receivables, net	$	34,235		$	33,947

XML

EARNINGS PER SHARE

6 Months Ended

Jun. 30, 2013

EARNINGS PER SHARE

EARNINGS PER SHARE

NOTE 12. EARNINGS PER SHARE

	Three Months Ended June 30,
$s and shares in thousands, except per share	2013				2012
amounts	Basic		Diluted		Basic		Diluted
Net income	7,210		$	7,210	$	6,362	$	6,362
Weighted average basic shares outstanding	18,401		18,401		18,228		18,228
Dilutive effect of stock options and restricted stock			82				36
Weighted average diluted shares outstanding			18,483				18,264
Earnings per share	$	0.39	$	0.39	$	0.35	$	0.35
Anti-dilutive shares excluded from calculation			196				331

	Six Months Ended June 30,
$s and shares in thousands, except per share	2013				2012
amounts	Basic		Diluted		Basic		Diluted
Net income	$	12,616	$	12,616	$	10,885	$	10,885
Weighted average basic shares outstanding	18,362		18,362		18,223		18,223
Dilutive effect of stock options and restricted stock			84				36
Weighted average diluted shares outstanding			18,446				18,259
Earnings per share	$	0.69	$	0.68	$	0.60	$	0.60
Anti-dilutive shares excluded from calculation			208				324

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CLOSURE AND POST-CLOSURE OBLIGATIONS (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
Changes to reported closure and post-closure obligations
Closure and post-closure obligations, beginning of period	$ 16,586	$ 17,362
Accretion expense	306	613	670
Payments	(128)	(1,171)
Adjustments	550	550
Currency translation	(62)	(102)
Closure and post-closure obligations, end of period	17,252	17,252
Less current portion	(937)	(937)		(1,913)
Long-term portion	$ 16,315	$ 16,315		$ 15,449

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GOODWILL AND INTANGIBLE ASSETS (Tables)

6 Months Ended

Jun. 30, 2013

GOODWILL AND INTANGIBLE ASSETS

Schedule of changes in goodwill

$s in thousands	Goodwill
Balance at December 31, 2012	$	23,105
Foreign currency translation	(1,188		)
Balance at June 30, 2013	$	21,917

Schedule of intangible assets

$s in thousands	June 30, 2013			December 31, 2012
Amortizing intangible assets:
Developed software	$	333		$	352
Database	95			100
Customer relationships	5,046			5,269
Technology - Formulae and processes	8,645			9,144
Permits, licenses and lease	26,553			28,085
Non-compete agreements	20			20
Total amortizing intangible assets	40,692			42,970
Accumulated amortization	(3,659		)	(3,120		)
Nonamortizing intangible assets:
Permits and licenses	750			750
Tradename	162			171
Total intangible assets, net	$	37,945		$	40,771

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BUSINESS COMBINATION (Tables) (US Ecology Michigan)

6 Months Ended

Jun. 30, 2013

US Ecology Michigan

BUSINESS ACQUISITIONS

Schedule of unaudited pro forma financial information

	(unaudited)		(unaudited)
	Three Months Ended		Six Months Ended
$s in thousands, except per share amounts	June 30, 2012		June 30, 2012
Pro forma combined:
Revenue	$	42,011	$	78,494
Net income	$	6,248	$	10,739
Earnings per share
Basic	$	0.34	$	0.59
Diluted	$	0.34	$	0.59

XML

PROPERTY AND EQUIPMENT (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
PROPERTY AND EQUIPMENT
Total property and equipment	$ 213,873		$ 213,873		$ 204,609
Accumulated depreciation and amortization	(100,579)		(100,579)		(94,817)
Property and equipment, net	113,294		113,294		109,792
Depreciation and amortization expense	3,600	3,600	7,071	6,794
Cell development costs
PROPERTY AND EQUIPMENT
Total property and equipment	65,239		65,239		64,994
Land and improvements
PROPERTY AND EQUIPMENT
Total property and equipment	18,090		18,090		14,920
Buildings and improvements
PROPERTY AND EQUIPMENT
Total property and equipment	55,949		55,949		55,177
Railcars
PROPERTY AND EQUIPMENT
Total property and equipment	17,375		17,375		17,375
Vehicles and other equipment
PROPERTY AND EQUIPMENT
Total property and equipment	42,235		42,235		39,689
Construction in progress
PROPERTY AND EQUIPMENT
Total property and equipment	$ 14,985		$ 14,985		$ 12,454

XML

COMMITMENTS AND CONTINGENCIES (Details) (USD $)	3 Months Ended
	Jun. 30, 2013
Future minimum lease payments on non-cancelable operating lease
2013	$ 34,000
2014	245,000
2015	301,000
2016	310,000
2017	318,000
Thereafter	382,000
Total	1,590,000
US Ecology and the thermal recycling operation owner-operator
Litigation and Regulatory Proceedings
Amount recognized in selling, general and administrative expenses regarding asserted various technical compliance and permitting violations of the Clean Air Act of 1970	$ 238,000

XML

OPERATING SEGMENTS (Tables)

6 Months Ended

Jun. 30, 2013

OPERATING SEGMENTS

Summary of financial information concerning reportable segments

Three Months Ended June 30, 2013 (in thousands)	Operating Disposal Facilities		Non- Operating Disposal Facilities			Corporate			Total
Revenue - Treatment and disposal	$	38,724	$	6		$	—		$	38,730
Revenue - Transportation services	7,047		—			—			7,047
Total revenue	45,771		6			—			45,777
Direct operating costs	19,705		54			—			19,759
Transportation costs	7,090		—			—			7,090
Gross profit (loss)	18,976		(48		)	—			18,928
Selling, general & administrative expense	3,267		—			3,252			6,519
Operating income (loss)	15,709		(48		)	(3,252		)	12,409
Interest income (expense), net	2		—			(222		)	(220		)
Foreign currency gain (loss)	320		—			(1,513		)	(1,193		)
Other income	91		3			—			94
Income (loss) before income taxes	16,122		(45		)	(4,987		)	11,090
Income tax expense	—		—			3,880			3,880
Net income (loss)	$	16,122	$	(45	)	$	(8,867	)	$	7,210
Depreciation, amortization & accretion	$	4,051	$	52		$	10		$	4,113
Capital expenditures	$	5,689	$	—		$	89		$	5,778
Total assets	$	213,197	$	88		$	8,058		$	221,343

Three Months Ended June 30, 2012 (in thousands)	Operating Disposal Facilities		Non- Operating Disposal Facilities			Corporate			Total
Revenue - Treatment and disposal	$	35,963	$	7		$	—		$	35,970
Revenue - Transportation services	4,010		—			—			4,010
Total revenue	39,973		7			—			39,980
Direct operating costs	18,576		57			—			18,633
Transportation costs	4,020		1			—			4,021
Gross profit (loss)	17,377		(51		)	—			17,326
Selling, general & administrative expense	2,921		—			3,445			6,366
Operating income (loss)	14,456		(51		)	(3,445		)	10,960
Interest income (expense), net	4		—			(204		)	(200		)
Foreign currency gain (loss)	17		—			(938		)	(921		)
Other income	521		1			—			522
Income (loss) before income taxes	14,998		(50		)	(4,587		)	10,361
Income tax expense	—		—			3,999			3,999
Net income (loss)	$	14,998	$	(50	)	$	(8,586	)	$	6,362
Depreciation, amortization & accretion	$	4,215	$	54		$	11		$	4,280
Capital expenditures	$	3,350	$	—		$	7		$	3,357
Total assets	$	206,652	$	103		$	9,370		$	216,125

Six Months Ended June 30, 2013 (in thousands)	Operating Disposal Facilities		Non- Operating Disposal Facilities			Corporate			Total
Revenue - Treatment and disposal	$	75,064	$	10		$	—		$	75,074
Revenue - Transportation services	13,602		—			—			13,602
Total revenue	88,666		10			—			88,676
Direct operating costs	40,736		107			—			40,843
Transportation costs	13,523		—			—			13,523
Gross profit (loss)	34,407		(97		)	—			34,310
Selling, general & administrative expense	5,913		—			6,332			12,245
Operating income (loss)	28,494		(97		)	(6,332		)	22,065
Interest income (expense), net	6		—			(442		)	(436		)
Foreign currency gain (loss)	432		—			(2,563		)	(2,131		)
Other income	186		5			—			191
Income (loss) before income taxes	29,118		(92		)	(9,337		)	19,689
Income tax expense	—		—			7,073			7,073
Net income (loss)	$	29,118	$	(92	)	$	(16,410	)	$	12,616
Depreciation, amortization & accretion	$	8,291	$	104		$	18		$	8,413
Capital expenditures	$	12,415	$	—		$	115		$	12,530
Total assets	$	213,197	$	88		$	8,058		$	221,343

Six Months Ended June 30, 2012 (in thousands)	Operating Disposal Facilities			Non- Operating Disposal  Facilities			Corporate			Total
Revenue - Treatment and disposal	$	65,908		$	11		$	—		$	65,919
Revenue - Transportation services	7,074			—			—			7,074
Total revenue	72,982			11			—			72,993
Direct operating costs	36,159			112			—			36,271
Transportation costs	7,319			1			—			7,320
Gross profit (loss)	29,504			(102		)	—			29,402
Selling, general & administrative expense	5,442			—			6,529			11,971
Operating income (loss)	24,062			(102		)	(6,529		)	17,431
Interest income (expense), net	9			—			(428		)	(419		)
Foreign currency gain (loss)	(82		)	—			252			170
Other income	601			1			—			602
Income (loss) before income taxes	24,590			(101		)	(6,705		)	17,784
Income tax expense	—			—			6,899			6,899
Net income (loss)	$	24,590		$	(101	)	$	(13,604	)	$	10,885
Depreciation, amortization & accretion	$	8,059		$	108		$	21		$	8,188
Capital expenditures	$	5,710		$	17		$	16		$	5,743
Total assets	$	206,652		$	103		$	9,370		$	216,125

Summary of revenues by geographic location

	Three Months Ended June 30,				Six Months Ended June 30,
$s in thousands	2013		2012		2013		2012
United States	$	32,620	$	30,939	$	64,019	$	55,538
Canada	13,157		9,041		24,657		17,455
Total revenue	$	45,777	$	39,980	$	88,676	$	72,993

Schedule of long-lived assets by geographic location

	June 30,		December 31,
$s in thousands	2013		2012
United States	$	85,875	$	81,605
Canada	65,364		68,958
Total long-lived assets	$	151,239	$	150,563

XML

OPERATING SEGMENTS (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013 segment	Jun. 30, 2012	Dec. 31, 2012
OPERATING SEGMENTS
Number of reportable segments			2
OPERATING SEGMENTS
Revenue	$ 45,777,000	$ 39,980,000	$ 88,676,000	$ 72,993,000
Direct operating costs	19,759,000	18,633,000	40,843,000	36,271,000
Transportation costs	7,090,000	4,021,000	13,523,000	7,320,000
Gross profit	18,928,000	17,326,000	34,310,000	29,402,000
Selling, general & administrative expenses	6,519,000	6,366,000	12,245,000	11,971,000
Operating income	12,409,000	10,960,000	22,065,000	17,431,000
Interest income (expense), net	(220,000)	(200,000)	(436,000)	(419,000)
Foreign currency gain (loss)	(1,193,000)	(921,000)	(2,131,000)	170,000
Other income	94,000	522,000	191,000	602,000
Income before income taxes	11,090,000	10,361,000	19,689,000	17,784,000
Income tax expense	3,880,000	3,999,000	7,073,000	6,899,000
Net income	7,210,000	6,362,000	12,616,000	10,885,000
Depreciation, amortization & accretion	4,113,000	4,280,000	8,413,000	8,188,000
Capital expenditures	5,778,000	3,357,000	12,530,000	5,743,000
Total assets	221,343,000	216,125,000	221,343,000	216,125,000	218,694,000
Treatment and disposal
OPERATING SEGMENTS
Revenue	38,730,000	35,970,000	75,074,000	65,919,000
Transportation services
OPERATING SEGMENTS
Revenue	7,047,000	4,010,000	13,602,000	7,074,000
Operating Disposal Facilities
OPERATING SEGMENTS
Revenue	45,771,000	39,973,000	88,666,000	72,982,000
Direct operating costs	19,705,000	18,576,000	40,736,000	36,159,000
Transportation costs	7,090,000	4,020,000	13,523,000	7,319,000
Gross profit	18,976,000	17,377,000	34,407,000	29,504,000
Selling, general & administrative expenses	3,267,000	2,921,000	5,913,000	5,442,000
Operating income	15,709,000	14,456,000	28,494,000	24,062,000
Interest income (expense), net	2,000	4,000	6,000	9,000
Foreign currency gain (loss)	320,000	17,000	432,000	(82,000)
Other income	91,000	521,000	186,000	601,000
Income before income taxes	16,122,000	14,998,000	29,118,000	24,590,000
Net income	16,122,000	14,998,000	29,118,000	24,590,000
Depreciation, amortization & accretion	4,051,000	4,215,000	8,291,000	8,059,000
Capital expenditures	5,689,000	3,350,000	12,415,000	5,710,000
Total assets	213,197,000	206,652,000	213,197,000	206,652,000
Operating Disposal Facilities | Treatment and disposal
OPERATING SEGMENTS
Revenue	38,724,000	35,963,000	75,064,000	65,908,000
Operating Disposal Facilities | Transportation services
OPERATING SEGMENTS
Revenue	7,047,000	4,010,000	13,602,000	7,074,000
Non-Operating Disposal Facilities
OPERATING SEGMENTS
Revenue	6,000	7,000	10,000	11,000
Direct operating costs	54,000	57,000	107,000	112,000
Transportation costs		1,000		1,000
Gross profit	(48,000)	(51,000)	(97,000)	(102,000)
Operating income	(48,000)	(51,000)	(97,000)	(102,000)
Other income	3,000	1,000	5,000	1,000
Income before income taxes	(45,000)	(50,000)	(92,000)	(101,000)
Net income	(45,000)	(50,000)	(92,000)	(101,000)
Depreciation, amortization & accretion	52,000	54,000	104,000	108,000
Capital expenditures				17,000
Total assets	88,000	103,000	88,000	103,000
Non-Operating Disposal Facilities | Treatment and disposal
OPERATING SEGMENTS
Revenue	6,000	7,000	10,000	11,000
Corporate
OPERATING SEGMENTS
Selling, general & administrative expenses	3,252,000	3,445,000	6,332,000	6,529,000
Operating income	(3,252,000)	(3,445,000)	(6,332,000)	(6,529,000)
Interest income (expense), net	(222,000)	(204,000)	(442,000)	(428,000)
Foreign currency gain (loss)	(1,513,000)	(938,000)	(2,563,000)	252,000
Income before income taxes	(4,987,000)	(4,587,000)	(9,337,000)	(6,705,000)
Income tax expense	3,880,000	3,999,000	7,073,000	6,899,000
Net income	(8,867,000)	(8,586,000)	(16,410,000)	(13,604,000)
Depreciation, amortization & accretion	10,000	11,000	18,000	21,000
Capital expenditures	89,000	7,000	115,000	16,000
Total assets	$ 8,058,000	$ 9,370,000	$ 8,058,000	$ 9,370,000

XML

PROPERTY AND EQUIPMENT (Tables)

6 Months Ended

Jun. 30, 2013

PROPERTY AND EQUIPMENT

Schedule of property and equipment

	June 30,			December 31,
$s in thousands	2013			2012
Cell development costs	$	65,239		$	64,994
Land and improvements	18,090			14,920
Buildings and improvements	55,949			55,177
Railcars	17,375			17,375
Vehicles and other equipment	42,235			39,689
Construction in progress	14,985			12,454
Total property and equipment	213,873			204,609
Accumulated depreciation and amortization	(100,579		)	(94,817		)
Property and equipment, net	$	113,294		$	109,792

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Cash flows from operating activities:
Net income	$ 12,616,000	$ 10,885,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property and equipment	7,071,000	6,794,000
Amortization of intangible assets	729,000	724,000
Accretion of closure and post-closure obligations	613,000	670,000
Unrealized foreign currency (gain) loss	2,400,000	(250,000)
Deferred income taxes	(1,665,000)	(1,218,000)
Share-based compensation expense	363,000	383,000
Unrecognized tax benefits	7,000	7,000
Net (gain) loss on sale of property and equipment	10,000	(20,000)
Changes in assets and liabilities:
Receivables	(682,000)	839,000
Income tax receivable	(787,000)	191,000
Other assets	(563,000)	(390,000)
Accounts payable and accrued liabilities	(1,583,000)	(3,699,000)
Deferred revenue	1,594,000	412,000
Accrued salaries and benefits	(2,386,000)	(307,000)
Income tax payable	582,000	761,000
Closure and post-closure obligations	(621,000)	(186,000)
Net cash provided by operating activities	17,698,000	15,596,000
Cash flows from investing activities:
Purchases of property and equipment	(12,530,000)	(5,743,000)
Business acquisition, net of cash acquired		(11,228,000)
Proceeds from sale of property and equipment	52,000	169,000
Restricted cash		5,000
Net cash used in investing activities	(12,478,000)	(16,797,000)
Cash flows from financing activities:
Payments on reducing revolving line of credit	(10,000,000)	(12,500,000)
Proceeds from reducing revolving line of credit	8,000,000	22,000,000
Proceeds from exercise of stock options	2,110,000
Deferred financing costs paid	(185,000)
Dividends paid	(3,314,000)	(6,565,000)
Other	261,000	(258,000)
Net cash (used in) provided by financing activities	(3,128,000)	2,677,000
Effect of foreign exchange rate changes on cash	(230,000)	140,000
Increase in cash and cash equivalents	1,862,000	1,616,000
Cash and cash equivalents at beginning of period	2,120,000	4,289,000
Cash and cash equivalents at end of period	3,982,000	5,905,000
Supplemental Disclosures
Income taxes paid, net of receipts	8,677,000	7,148,000
Interest paid	367,000	418,000
Non-cash investing and financing activities:
Capital expenditures in accounts payable	504,000	2,446,000
Restricted stock issued from treasury shares	$ 779,000	$ 372,000

XML

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

6 Months Ended

Jun. 30, 2013

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

NOTE 2. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Changes in accumulated other comprehensive income (loss), comprised entirely of foreign currency translation adjustments, consisted of the following:

	Three Months Ended June 30,						Six Months Ended June 30,
$s in thousands	2013			2012			2013			2012
Balance, beginning of period	$	(122	)	$	518		$	628		$	(117	)
Foreign currency translation gain (loss) in other comprehensive income	(1,179		)	(500		)	(1,929		)	135
Balance, end of period	$	(1,301	)	$	18		$	(1,301	)	$	18

XML

PROPERTY AND EQUIPMENT

6 Months Ended

Jun. 30, 2013

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT

NOTE 5. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

	June 30,			December 31,
$s in thousands	2013			2012
Cell development costs	$	65,239		$	64,994
Land and improvements	18,090			14,920
Buildings and improvements	55,949			55,177
Railcars	17,375			17,375
Vehicles and other equipment	42,235			39,689
Construction in progress	14,985			12,454
Total property and equipment	213,873			204,609
Accumulated depreciation and amortization	(100,579		)	(94,817		)
Property and equipment, net	$	113,294		$	109,792

Depreciation and amortization expense for each of the three months ended June 30, 2013 and 2012 was $3.6 million. Depreciation and amortization expense for the six months ended June 30, 2013 and 2012 was $7.1 million and $6.8 million, respectively.

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CONCENTRATIONS AND CREDIT RISK

6 Months Ended

Jun. 30, 2013

CONCENTRATIONS AND CREDIT RISK

CONCENTRATIONS AND CREDIT RISK

NOTE 3. CONCENTRATIONS AND CREDIT RISK

Major Customers

No customer accounted for more than 10% of total revenue for the three and six months ended June 30, 2013 or 2012. No customer accounted for more than 10% of total trade receivables as of June 30, 2013 or December 31, 2012.

Credit Risk Concentration

We maintain most of our cash with nationally recognized financial institutions like Wells Fargo Bank, National Association (“Wells Fargo”). Substantially all balances are uninsured and are not used as collateral for other obligations. Concentrations of credit risk on accounts receivable are believed to be limited due to the number, diversification and character of the obligors and our credit evaluation process.

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EARNINGS PER SHARE (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Basic
Net income	$ 7,210	$ 6,362	$ 12,616	$ 10,885
Weighted average basic shares outstanding	18,401	18,228	18,362	18,223
Earnings per share (in dollars per share)	$ 0.39	$ 0.35	$ 0.69	$ 0.60
Diluted
Net income	$ 7,210	$ 6,362	$ 12,616	$ 10,885
Weighted average basic shares outstanding	18,401	18,228	18,362	18,223
Dilutive effect of stock options and restricted stock (in shares)	82	36	84	36
Weighted average diluted shares outstanding	18,483	18,264	18,446	18,259
Earnings per share (in dollars per share)	$ 0.39	$ 0.35	$ 0.68	$ 0.60
Anti-dilutive shares excluded from calculation	196	331	208	324

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CLOSURE AND POST-CLOSURE OBLIGATIONS (Tables)

6 Months Ended

Jun. 30, 2013

CLOSURE AND POST-CLOSURE OBLIGATIONS

Schedule of changes in closure and post-closure obligations

	Three Months Ended			Six Months Ended
$s in thousands	June 30, 2013			June 30, 2013
Closure and post-closure obligations, beginning of period	$	16,586		$	17,362
Accretion expense	306			613
Payments	(128		)	(1,171		)
Adjustments	550			550
Currency translation	(62		)	(102		)
Closure and post-closure obligations, end of period	17,252			17,252
Less current portion	(937		)	(937		)
Long-term portion	$	16,315		$	16,315

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Changes in accumulated other comprehensive income (loss)
Balance at the beginning of the period	$ (122)	$ 518	$ 628	$ (117)
Foreign currency translation gain (loss) in other comprehensive income	(1,179)	(500)	(1,929)	135
Balance at the end of the period	$ (1,301)	$ 18	$ (1,301)	$ 18

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DEBT (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2013
DEBT
Maximum borrowing capacity	$ 95.0
Revolving Line of Credit
DEBT
Maximum borrowing capacity	20.0
Effective interest rate (as a percent)	1.44%
Amount outstanding	0
Availability for additional borrowings under line of credit	16.0
Line of credit issued in the form of a standby letter of credit	4.0
Reducing Revolving Line of Credit
DEBT
Maximum borrowing capacity	75.0
Reduction in commitment amount for each quarter	2.8
Effective interest rate (as a percent)	1.44%
Amount outstanding	43.0
Availability for additional borrowings under line of credit	$ 26.4

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SUBSEQUENT EVENT (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	6 Months Ended		0 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jul. 25, 2013 Subsequent event	Jul. 01, 2013 Subsequent event
SUBSEQUENT EVENT
Quarterly dividend declared (in dollars per share)				$ 0.18
Dividend paid in cash	$ 3,314	$ 6,565	$ 3,300

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
CONSOLIDATED BALANCE SHEETS
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	50,000	50,000
Common stock, shares issued	18,530	18,385
Treasury stock, shares	24	71

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DEBT

6 Months Ended

Jun. 30, 2013

DEBT

DEBT

NOTE 8. DEBT

On October 29, 2010, we entered a credit agreement with Wells Fargo which, as amended, provides for an aggregate commitment from Wells Fargo of $95.0 million (the “Credit Agreement”). The Credit Agreement provides for a $20.0 million revolving line of credit (the “Revolving Line of Credit”) with a maturity date of November 1, 2015 and a $75.0 million reducing revolving line of credit (the “Reducing Revolving Line of Credit”) with a maturity date of November 1, 2015.

Revolving Line of Credit

The Revolving Line of Credit provides up to $20.0 million in revolving credit loans or letters of credit for working capital needs (the “Commitment Amount”).  Under the Revolving Line of Credit, revolving loans are available based on the Prime Rate or the LIBOR, at the Company’s option, plus an applicable margin which is determined according to a pricing grid under which the interest rate decreases or increases based on our ratio of funded debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”). At June 30, 2013, the effective interest rate on the Revolving Line of Credit was 1.44%. Interest only payments are due either monthly or on the last day of any interest period, as applicable. At June 30, 2013, there were no borrowings outstanding under the Revolving Line of Credit. The availability under the Revolving Line of Credit was $16.0 million, with $4.0 million of the line of credit issued in the form of a standby letter of credit utilized as collateral for closure and post-closure financial assurance.

Reducing Revolving Line of Credit

The Reducing Revolving Line of Credit provides an initial commitment amount of $75.0 million (the “Reducing Revolving Commitment Amount”).  Proceeds from the Reducing Revolving Line of Credit were used to acquire all of the shares of Stablex in 2010 and to acquire US Ecology Michigan in 2012. Remaining borrowings are available for working capital needs. The Reducing Revolving Commitment Amount is reduced by $2.8 million on the last day of each March, June, September and December beginning March 31, 2013, continuing through November 1, 2015. Under the Reducing Revolving Line of Credit revolving loans are available based on the Prime Rate or LIBOR, at the Company’s option, plus an applicable margin, which is determined according to a pricing grid under which the interest rate decreases or increases based on our ratio of funded debt to EBITDA. At June 30, 2013, the effective interest rate of the Reducing Revolving Line of Credit was 1.44%.  Interest only payments are due either monthly or on the last day of any interest period, as applicable.  At June 30, 2013, $43.0 million was outstanding on the Reducing Revolving Line of Credit with $26.4 million available for additional borrowings.

In addition to standard fees, origination fees and commitment fees apply to the average daily unused portion of the Commitment Amount and the Reducing Revolving Commitment Amount. The Credit Agreement contains certain quarterly financial covenants, including a maximum funded debt ratio, a maximum fixed charge coverage ratio, a minimum required tangible net worth and a minimum current ratio. We may only declare quarterly or annual dividends if on the date of declaration, no event of default has occurred and no other event or condition has occurred that would constitute default due to the payment of the dividend. Obligations under the Credit Agreement are guaranteed by US Ecology and all of its subsidiaries.

At June 30, 2013, we were in compliance with all of the financial covenants in the Credit Agreement.

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income	$ 7,210	$ 6,362	$ 12,616	$ 10,885
Other comprehensive income (loss):
Foreign currency translation gain (loss)	(1,179)	(500)	(1,929)	135
Comprehensive income	$ 6,031	$ 5,862	$ 10,687	$ 11,020

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CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Current Assets:
Cash and cash equivalents	$ 3,982	$ 2,120
Receivables, net	34,235	33,947
Prepaid expenses and other current assets	3,847	3,161
Income taxes receivable	787
Deferred income taxes	799	1,276
Total current assets	43,650	40,504
Property and equipment, net	113,294	109,792
Restricted cash	4,111	4,111
Intangible assets, net	37,945	40,771
Goodwill	21,917	23,105
Other assets	426	411
Total assets	221,343	218,694
Current Liabilities:
Accounts payable	4,484	6,333
Deferred revenue	5,381	3,919
Accrued liabilities	7,506	7,322
Accrued salaries and benefits	5,040	7,570
Income taxes payable	972	426
Current portion of closure and post-closure obligations	937	1,913
Total current liabilities	24,320	27,483
Long-term closure and post-closure obligations	16,315	15,449
Reducing revolving line of credit	43,000	45,000
Other long-term liabilities	88	114
Unrecognized tax benefits	474	467
Deferred income taxes	15,338	18,159
Total liabilities	99,535	106,672
Commitments and contingencies
Stockholders' Equity:
Common stock $0.01 par value, 50,000 authorized; 18,530 and 18,385 shares issued, respectively	185	184
Additional paid-in capital	65,603	63,969
Retained earnings	57,725	48,424
Treasury stock, at cost, 24 and 71 shares, respectively	(404)	(1,183)
Accumulated other comprehensive income (loss)	(1,301)	628
Total stockholders' equity	121,808	112,022
Total liabilities and stockholders' equity	$ 221,343	$ 218,694

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COMMITMENTS AND CONTINGENCIES (Tables)

6 Months Ended

Jun. 30, 2013

COMMITMENTS AND CONTINGENCIES

Schedule of future minimum lease payments on non-cancelable operating leases

$s in thousands	Payments
2013	$	34
2014	245
2015	301
2016	310
2017	318
Thereafter	382
	$	1,590

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables)

6 Months Ended

Jun. 30, 2013

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Schedule of changes in accumulated other comprehensive income (loss)

	Three Months Ended June 30,						Six Months Ended June 30,
$s in thousands	2013			2012			2013			2012
Balance, beginning of period	$	(122	)	$	518		$	628		$	(117	)
Foreign currency translation gain (loss) in other comprehensive income	(1,179		)	(500		)	(1,929		)	135
Balance, end of period	$	(1,301	)	$	18		$	(1,301	)	$	18

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OPERATING SEGMENTS (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
Revenue, Property and Equipment and Intangible Assets Outside of the United States
Total revenue	$ 45,777	$ 39,980	$ 88,676	$ 72,993
Total long- lived assets	151,239		151,239		150,563
United States
Revenue, Property and Equipment and Intangible Assets Outside of the United States
Total revenue	32,620	30,939	64,019	55,538
Total long- lived assets	85,875		85,875		81,605
Canada
Revenue, Property and Equipment and Intangible Assets Outside of the United States
Total revenue	13,157	9,041	24,657	17,455
Total long- lived assets	$ 65,364		$ 65,364		$ 68,958

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INCOME TAXES (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
INCOME TAXES
Effective tax rate (as a percent)	35.00%	38.60%	35.90%	38.80%

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BUSINESS COMBINATION (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	May 31, 2012
Additional information
Revenue	$ 45,777,000	$ 39,980,000	$ 88,676,000	$ 72,993,000
Operating income	12,409,000	10,960,000	22,065,000	17,431,000
US Ecology Michigan
BUSINESS ACQUISITIONS
Percentage of outstanding shares acquired					100.00%
Pro forma combined:
Revenue		42,011,000		78,494,000
Net income		6,248,000		10,739,000
Earnings per share - Basic (in dollars per share)		$ 0.34		$ 0.59
Earnings per share - Diluted (in dollars per share)		$ 0.34		$ 0.59
Additional information
Revenue	3,400,000		6,200,000
Operating income	$ 288,000		$ 193,000

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GOODWILL AND INTANGIBLE ASSETS (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
Changes in goodwill
Balance at the beginning of the period			$ 23,105,000
Foreign currency translation			(1,188,000)
Balance at the end of the period	21,917,000		21,917,000
Intangible assets
Total amortizing intangible assets	40,692,000		40,692,000		42,970,000
Accumulated amortization	(3,659,000)		(3,659,000)		(3,120,000)
Total intangible assets, net	37,945,000		37,945,000		40,771,000
Amortization expense	362,000	374,000	729,000	724,000
Permits and licenses
Intangible assets
Nonamortizing intangible assets	750,000		750,000		750,000
Tradename
Intangible assets
Nonamortizing intangible assets	162,000		162,000		171,000
Developed software
Intangible assets
Total amortizing intangible assets	333,000		333,000		352,000
Database
Intangible assets
Total amortizing intangible assets	95,000		95,000		100,000
Customer relationships
Intangible assets
Total amortizing intangible assets	5,046,000		5,046,000		5,269,000
Technology - Formulae and processes
Intangible assets
Total amortizing intangible assets	8,645,000		8,645,000		9,144,000
Permits, licenses and lease
Intangible assets
Total amortizing intangible assets	26,553,000		26,553,000		28,085,000
Non-compete agreements
Intangible assets
Total amortizing intangible assets	$ 20,000		$ 20,000		$ 20,000

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GOODWILL AND INTANGIBLE ASSETS

6 Months Ended

Jun. 30, 2013

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS

NOTE 7. GOODWILL AND INTANGIBLE ASSETS

The Company’s entire goodwill balance has been assigned to the Operating Disposal Facilities reporting segment.  Changes in goodwill for the six months ended June 30, 2013 consisted of the following:

$s in thousands	Goodwill
Balance at December 31, 2012	$	23,105
Foreign currency translation	(1,188		)
Balance at June 30, 2013	$	21,917

Intangible assets consisted of the following:

$s in thousands	June 30, 2013			December 31, 2012
Amortizing intangible assets:
Developed software	$	333		$	352
Database	95			100
Customer relationships	5,046			5,269
Technology - Formulae and processes	8,645			9,144
Permits, licenses and lease	26,553			28,085
Non-compete agreements	20			20
Total amortizing intangible assets	40,692			42,970
Accumulated amortization	(3,659		)	(3,120		)
Nonamortizing intangible assets:
Permits and licenses	750			750
Tradename	162			171
Total intangible assets, net	$	37,945		$	40,771

Amortization expense for the three months ended June 30, 2013 and 2012 was $362,000 and $374,000, respectively. Amortization expense for the six months ended June 30, 2013 and 2012 was $729,000 and $724,000, respectively.

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EARNINGS PER SHARE (Tables)

6 Months Ended

Jun. 30, 2013

EARNINGS PER SHARE

Schedule of earnings per share

	Three Months Ended June 30,
$s and shares in thousands, except per share	2013				2012
amounts	Basic		Diluted		Basic		Diluted
Net income	7,210		$	7,210	$	6,362	$	6,362
Weighted average basic shares outstanding	18,401		18,401		18,228		18,228
Dilutive effect of stock options and restricted stock			82				36
Weighted average diluted shares outstanding			18,483				18,264
Earnings per share	$	0.39	$	0.39	$	0.35	$	0.35
Anti-dilutive shares excluded from calculation			196				331

	Six Months Ended June 30,
$s and shares in thousands, except per share	2013				2012
amounts	Basic		Diluted		Basic		Diluted
Net income	$	12,616	$	12,616	$	10,885	$	10,885
Weighted average basic shares outstanding	18,362		18,362		18,223		18,223
Dilutive effect of stock options and restricted stock			84				36
Weighted average diluted shares outstanding			18,446				18,259
Earnings per share	$	0.69	$	0.68	$	0.60	$	0.60
Anti-dilutive shares excluded from calculation			208				324

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EQUITY (Details) (USD $)	6 Months Ended
	Jun. 30, 2013
EQUITY
Number of options exercised (in shares)	238,345
Weighted-average exercise price of options exercised (in dollars per share)	$ 18.95
Issuance of restricted stock from treasury stock (in shares)	46,700
Average cost (in dollars per share)	$ 16.68

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INCOME TAXES

6 Months Ended

Jun. 30, 2013

INCOME TAXES

INCOME TAXES

NOTE 10. INCOME TAXES

During the six months ended June 30, 2013, there were no material changes to our unrecognized tax benefits disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012. We do not anticipate our total unrecognized tax benefits to increase or decrease materially within the next twelve months.

Our effective tax rate for the three months ended June 30, 2013 was 35.0%, down from 38.6% for the three months ended June 30, 2012. Our effective tax rate for the six months ended June 30, 2013 was 35.9%, down from 38.8% for the six months ended June 30, 2012. The decrease for both the three and six months ended June 30, 2013 reflects a higher proportion of earnings from our Canadian operations, which are taxed at a lower corporate tax rate, partially offset by higher U.S. state income taxes.

We file a consolidated U.S. federal income tax return with the Internal Revenue Service as well as income tax returns in various states and Canada. We may be subject to examination by taxing authorities in the U.S. and Canada for tax years 2009 through 2012. Additionally, we may be subject to examinations by various state and local taxing jurisdictions for tax years 2008 through 2012.

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BUSINESS COMBINATION

6 Months Ended

Jun. 30, 2013

BUSINESS COMBINATION

BUSINESS COMBINATION

NOTE 6. BUSINESS COMBINATION

On May 31, 2012, the Company acquired 100% of the outstanding shares of US Ecology Michigan, Inc. (“US Ecology Michigan”), formerly Dynecol, Inc., a chemical and industrial byproducts treatment and reuse facility located in Detroit, Michigan. The following unaudited pro forma financial information presents the combined results of operations as if US Ecology Michigan had been combined with us beginning on January 1, 2012. The pro forma financial information includes the accounting impact of the business combination, including the amortization of intangible assets, depreciation of property, plant and equipment and interest expense. The unaudited pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of the period presented, nor should it be taken as an indication of our future consolidated results of operations.

	(unaudited)		(unaudited)
	Three Months Ended		Six Months Ended
$s in thousands, except per share amounts	June 30, 2012		June 30, 2012
Pro forma combined:
Revenue	$	42,011	$	78,494
Net income	$	6,248	$	10,739
Earnings per share
Basic	$	0.34	$	0.59
Diluted	$	0.34	$	0.59

The amounts of revenue and operating income from US Ecology Michigan included in US Ecology’s consolidated statements of operations for the three months ended June 30, 2013 were $3.4 million and $288,000, respectively. The amounts of revenue and operating income from US Ecology Michigan included in US Ecology’s consolidated statements of operations for the six months ended June 30, 2013 were $6.2 million and $193,000, respectively.

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GENERAL

6 Months Ended

Jun. 30, 2013

GENERAL

GENERAL

NOTE 1. GENERAL

Basis of Presentation

The accompanying unaudited consolidated financial statements include the results of operations, financial position and cash flows of US Ecology, Inc. and its wholly-owned subsidiaries. All significant intercompany balances have been eliminated.  Throughout these financial statements words such as “we,” “us,” “our,” “US Ecology” and the “Company” refer to US Ecology, Inc. and its subsidiaries.

In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments necessary to present fairly, in all material respects, the results of the Company for the periods presented. These consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been omitted pursuant to the rules and regulations of the SEC. These consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012. The results of operations and cash flows for the six months ended June 30, 2013 are not necessarily indicative of results to be expected for the entire fiscal year.

The Company’s Consolidated Balance Sheet as of December 31, 2012 has been derived from the Company’s audited Consolidated Balance Sheet as of that date.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from the estimates and assumptions that we use in the preparation of our financial statements. As it relates to estimates and assumptions in amortization rates and environmental obligations, significant engineering, operations and accounting judgments are required. We review these estimates and assumptions no less than annually. In many circumstances, the ultimate outcome of these estimates and assumptions will not be known for decades into the future. Actual results could differ materially from these estimates and assumptions due to changes in applicable regulations, changes in future operational plans and inherent imprecision associated with estimating environmental impacts far into the future.

Financial Instruments

Cash on deposit, accounts receivable, short-term borrowings, accounts payable and accrued liabilities as presented in the consolidated financial statements approximate fair value because of the short-term nature of these instruments.  The carrying amount of our long-term debt approximates fair value because interest rates are variable and, accordingly, approximate current market rates for instruments with similar risk and maturities. Restricted cash balances represent funds held in third-party managed trust accounts as collateral for our financial assurance obligations for post-closure activities at our non-operating facilities.  Restricted cash balances are maintained by third-party trustees and are invested in money market accounts.  The balances are adjusted monthly to fair market value based on quoted prices in active markets for identical assets.

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RECEIVABLES (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
RECEIVABLES
Trade	$ 33,014	$ 32,787
Unbilled revenue	1,396	1,529
Other	289	99
Total receivables	34,699	34,415
Allowance for doubtful accounts	(464)	(468)
Receivables, net	$ 34,235	$ 33,947

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EQUITY

6 Months Ended

Jun. 30, 2013

EQUITY

EQUITY

NOTE 13. EQUITY

During the six months ended June 30, 2013, option holders exercised 238,345 options, respectively, with a weighted-average exercise price of $18.95 per option. During the six months ended June 30, 2013, the Company issued 46,700 shares of restricted stock from our treasury stock at an average cost of $16.68 per share.

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CLOSURE AND POST-CLOSURE OBLIGATIONS

6 Months Ended

Jun. 30, 2013

CLOSURE AND POST-CLOSURE OBLIGATIONS

CLOSURE AND POST-CLOSURE OBLIGATIONS

NOTE 9. CLOSURE AND POST-CLOSURE OBLIGATIONS

Our accrued closure and post-closure obligations represent the expected future costs, including corrective actions, associated with closure and post-closure of our operating and non-operating disposal facilities. Liabilities are recorded when work is probable and the costs can be reasonably estimated. We perform periodic reviews of both non-operating and operating facilities and revise accruals for estimated closure and post-closure, remediation or other costs as necessary. Recorded liabilities are based on our best estimates of current costs and are updated periodically to include the effects of existing technology, presently enacted laws and regulations, inflation and other economic factors.

Changes in closure and post-closure obligations consisted of the following:

	Three Months Ended			Six Months Ended
$s in thousands	June 30, 2013			June 30, 2013
Closure and post-closure obligations, beginning of period	$	16,586		$	17,362
Accretion expense	306			613
Payments	(128		)	(1,171		)
Adjustments	550			550
Currency translation	(62		)	(102		)
Closure and post-closure obligations, end of period	17,252			17,252
Less current portion	(937		)	(937		)
Long-term portion	$	16,315		$	16,315

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GENERAL (Policies)

6 Months Ended

Jun. 30, 2013

GENERAL

Basis of presentation

Basis of Presentation

The accompanying unaudited consolidated financial statements include the results of operations, financial position and cash flows of US Ecology, Inc. and its wholly-owned subsidiaries. All significant intercompany balances have been eliminated.  Throughout these financial statements words such as “we,” “us,” “our,” “US Ecology” and the “Company” refer to US Ecology, Inc. and its subsidiaries.

In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments necessary to present fairly, in all material respects, the results of the Company for the periods presented. These consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been omitted pursuant to the rules and regulations of the SEC. These consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012. The results of operations and cash flows for the six months ended June 30, 2013 are not necessarily indicative of results to be expected for the entire fiscal year.

The Company’s Consolidated Balance Sheet as of December 31, 2012 has been derived from the Company’s audited Consolidated Balance Sheet as of that date.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from the estimates and assumptions that we use in the preparation of our financial statements. As it relates to estimates and assumptions in amortization rates and environmental obligations, significant engineering, operations and accounting judgments are required. We review these estimates and assumptions no less than annually. In many circumstances, the ultimate outcome of these estimates and assumptions will not be known for decades into the future. Actual results could differ materially from these estimates and assumptions due to changes in applicable regulations, changes in future operational plans and inherent imprecision associated with estimating environmental impacts far into the future.

Financial Instruments

Financial Instruments

Cash on deposit, accounts receivable, short-term borrowings, accounts payable and accrued liabilities as presented in the consolidated financial statements approximate fair value because of the short-term nature of these instruments.  The carrying amount of our long-term debt approximates fair value because interest rates are variable and, accordingly, approximate current market rates for instruments with similar risk and maturities. Restricted cash balances represent funds held in third-party managed trust accounts as collateral for our financial assurance obligations for post-closure activities at our non-operating facilities.  Restricted cash balances are maintained by third-party trustees and are invested in money market accounts.  The balances are adjusted monthly to fair market value based on quoted prices in active markets for identical assets.

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OPERATING SEGMENTS

6 Months Ended

Jun. 30, 2013

OPERATING SEGMENTS

OPERATING SEGMENTS

NOTE 14.    OPERATING SEGMENTS

We operate within two segments, Operating Disposal Facilities and Non-Operating Disposal Facilities. These segments reflect our internal reporting structure and nature of services offered. The Operating Disposal Facility segment represents disposal facilities accepting hazardous and radioactive waste. The Non-Operating Disposal Facility segment represents facilities which are not accepting hazardous and/or radioactive waste or formerly proposed new facilities.

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

Summarized financial information concerning our reportable segments is shown in the following tables:

Three Months Ended June 30, 2013 (in thousands)	Operating Disposal Facilities		Non- Operating Disposal Facilities			Corporate			Total
Revenue - Treatment and disposal	$	38,724	$	6		$	—		$	38,730
Revenue - Transportation services	7,047		—			—			7,047
Total revenue	45,771		6			—			45,777
Direct operating costs	19,705		54			—			19,759
Transportation costs	7,090		—			—			7,090
Gross profit (loss)	18,976		(48		)	—			18,928
Selling, general & administrative expense	3,267		—			3,252			6,519
Operating income (loss)	15,709		(48		)	(3,252		)	12,409
Interest income (expense), net	2		—			(222		)	(220		)
Foreign currency gain (loss)	320		—			(1,513		)	(1,193		)
Other income	91		3			—			94
Income (loss) before income taxes	16,122		(45		)	(4,987		)	11,090
Income tax expense	—		—			3,880			3,880
Net income (loss)	$	16,122	$	(45	)	$	(8,867	)	$	7,210
Depreciation, amortization & accretion	$	4,051	$	52		$	10		$	4,113
Capital expenditures	$	5,689	$	—		$	89		$	5,778
Total assets	$	213,197	$	88		$	8,058		$	221,343

Three Months Ended June 30, 2012 (in thousands)	Operating Disposal Facilities		Non- Operating Disposal Facilities			Corporate			Total
Revenue - Treatment and disposal	$	35,963	$	7		$	—		$	35,970
Revenue - Transportation services	4,010		—			—			4,010
Total revenue	39,973		7			—			39,980
Direct operating costs	18,576		57			—			18,633
Transportation costs	4,020		1			—			4,021
Gross profit (loss)	17,377		(51		)	—			17,326
Selling, general & administrative expense	2,921		—			3,445			6,366
Operating income (loss)	14,456		(51		)	(3,445		)	10,960
Interest income (expense), net	4		—			(204		)	(200		)
Foreign currency gain (loss)	17		—			(938		)	(921		)
Other income	521		1			—			522
Income (loss) before income taxes	14,998		(50		)	(4,587		)	10,361
Income tax expense	—		—			3,999			3,999
Net income (loss)	$	14,998	$	(50	)	$	(8,586	)	$	6,362
Depreciation, amortization & accretion	$	4,215	$	54		$	11		$	4,280
Capital expenditures	$	3,350	$	—		$	7		$	3,357
Total assets	$	206,652	$	103		$	9,370		$	216,125

Six Months Ended June 30, 2013 (in thousands)	Operating Disposal Facilities		Non- Operating Disposal Facilities			Corporate			Total
Revenue - Treatment and disposal	$	75,064	$	10		$	—		$	75,074
Revenue - Transportation services	13,602		—			—			13,602
Total revenue	88,666		10			—			88,676
Direct operating costs	40,736		107			—			40,843
Transportation costs	13,523		—			—			13,523
Gross profit (loss)	34,407		(97		)	—			34,310
Selling, general & administrative expense	5,913		—			6,332			12,245
Operating income (loss)	28,494		(97		)	(6,332		)	22,065
Interest income (expense), net	6		—			(442		)	(436		)
Foreign currency gain (loss)	432		—			(2,563		)	(2,131		)
Other income	186		5			—			191
Income (loss) before income taxes	29,118		(92		)	(9,337		)	19,689
Income tax expense	—		—			7,073			7,073
Net income (loss)	$	29,118	$	(92	)	$	(16,410	)	$	12,616
Depreciation, amortization & accretion	$	8,291	$	104		$	18		$	8,413
Capital expenditures	$	12,415	$	—		$	115		$	12,530
Total assets	$	213,197	$	88		$	8,058		$	221,343

Six Months Ended June 30, 2012 (in thousands)	Operating Disposal Facilities			Non- Operating Disposal  Facilities			Corporate			Total
Revenue - Treatment and disposal	$	65,908		$	11		$	—		$	65,919
Revenue - Transportation services	7,074			—			—			7,074
Total revenue	72,982			11			—			72,993
Direct operating costs	36,159			112			—			36,271
Transportation costs	7,319			1			—			7,320
Gross profit (loss)	29,504			(102		)	—			29,402
Selling, general & administrative expense	5,442			—			6,529			11,971
Operating income (loss)	24,062			(102		)	(6,529		)	17,431
Interest income (expense), net	9			—			(428		)	(419		)
Foreign currency gain (loss)	(82		)	—			252			170
Other income	601			1			—			602
Income (loss) before income taxes	24,590			(101		)	(6,705		)	17,784
Income tax expense	—			—			6,899			6,899
Net income (loss)	$	24,590		$	(101	)	$	(13,604	)	$	10,885
Depreciation, amortization & accretion	$	8,059		$	108		$	21		$	8,188
Capital expenditures	$	5,710		$	17		$	16		$	5,743
Total assets	$	206,652		$	103		$	9,370		$	216,125

Revenue, Property and Equipment and Intangible Assets Outside of the United States

We provide services in the United States and Canada. Revenues by geographic location where the underlying services were performed consisted of the following:

Geographic disclosure

	Three Months Ended June 30,				Six Months Ended June 30,
$s in thousands	2013		2012		2013		2012
United States	$	32,620	$	30,939	$	64,019	$	55,538
Canada	13,157		9,041		24,657		17,455
Total revenue	$	45,777	$	39,980	$	88,676	$	72,993

Long-lived assets, comprised of property and equipment and intangible assets net of accumulated depreciation and amortization, by geographic location consisted of the following:

	June 30,		December 31,
$s in thousands	2013		2012
United States	$	85,875	$	81,605
Canada	65,364		68,958
Total long-lived assets	$	151,239	$	150,563

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Document and Entity Information	6 Months Ended
	Jun. 30, 2013	Jul. 26, 2013
Document and Entity Information
Entity Registrant Name	US ECOLOGY, INC.
Entity Central Index Key	0000742126
Document Type	10-Q
Document Period End Date	Jun. 30, 2013
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		18,530,085
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2

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SUBSEQUENT EVENT

6 Months Ended

Jun. 30, 2013

SUBSEQUENT EVENT

SUBSEQUENT EVENT

NOTE 15. SUBSEQUENT EVENT

On July 1, 2013, we declared a quarterly dividend of $0.18 per common share to stockholders of record on July 17, 2013. The dividend was paid using cash on hand on July 25, 2013 in an aggregate amount of $3.3 million.