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 September 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 October 25, 2013, there were 18,534,510 shares of the registrant’s Common Stock outstanding.

US ECOLOGY, INC.

FORM 10-Q

TABLE OF CONTENTS

Item			Page
	PART I — FINANCIAL INFORMATION
1.	Financial Statements (Unaudited)		3
		Consolidated Balance Sheets as of September 30, 2013 and December 31, 2012	3
		Consolidated Statements of Operations for the three and nine months ended September 30, 2013 and 2012	4
		Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2013 and 2012	5
		Consolidated Statements of Cash Flows for the nine months ended September 30, 2013 and 2012	6
		Notes to Consolidated Financial Statements	7
		Report of Independent Registered Public Accounting Firm	17
2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		18
3.	Quantitative and Qualitative Disclosures About Market Risk		27
4.	Controls and Procedures		27
	PART II — OTHER INFORMATION
	Cautionary Statement		28
1.	Legal Proceedings		28
1A.	Risk Factors		28
2.	Unregistered Sales of Equity Securities and Use of Proceeds		29
3.	Defaults Upon Senior Securities		29
4.	Mine Safety Disclosures		29
5.	Other Information		29
6.	Exhibits		29
	SIGNATURE		30

2

PART I - FINANCIAL INFORMATION

ITEM 1.FINANCIAL STATEMENTS

US ECOLOGY, INC.

CONSOLIDATED BALANCE SHEETS

 (Unaudited)

(In thousands, except par value amount)

	September 30, 2013			December 31, 2012
Assets
Current Assets:
Cash and cash equivalents	$	4,378		$	2,120
Receivables, net	40,794			33,947
Prepaid expenses and other current assets	4,076			3,161
Deferred income taxes	888			1,276
Total current assets	50,136			40,504
Property and equipment, net	115,284			109,792
Restricted cash	4,111			4,111
Intangible assets, net	38,354			40,771
Goodwill	22,359			23,105
Other assets	487			411
Total assets	$	230,731		$	218,694
Liabilities And Stockholders’ Equity
Current Liabilities:
Accounts payable	$	8,070		$	6,333
Deferred revenue	6,439			3,919
Accrued liabilities	8,291			7,322
Accrued salaries and benefits	5,925			7,570
Income taxes payable	3,168			426
Current portion of closure and post-closure obligations	894			1,913
Total current liabilities	32,787			27,483
Long-term closure and post-closure obligations	16,286			15,449
Reducing revolving line of credit	35,500			45,000
Other long-term liabilities	80			114
Unrecognized tax benefits	477			467
Deferred income taxes	15,693			18,159
Total liabilities	100,823			106,672
Commitments and contingencies
Stockholders’ Equity:
Common stock $0.01 par value, 50,000 authorized; 18,534 and 18,385 shares issued, respectively	185			184
Additional paid-in capital	65,838			63,969
Retained earnings	64,723			48,424
Treasury stock, at cost, 19 and 71 shares, respectively	(319		)	(1,183		)
Accumulated other comprehensive income (loss)	(519		)	628
Total stockholders’ equity	129,908			112,022
Total liabilities and stockholders’ equity	$	230,731		$	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 September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Revenue	$	53,090		$	45,739		$	141,766		$	118,732
Direct operating costs	20,902			19,893			61,745			56,164
Transportation costs	10,568			7,257			24,091			14,577
Gross profit	21,620			18,589			55,930			47,991
Selling, general and administrative expenses	6,108			6,196			18,353			18,167
Operating income	15,512			12,393			37,577			29,824
Other income (expense):
Interest income	4			4			11			13
Interest expense	(208		)	(231		)	(651		)	(659		)
Foreign currency gain (loss)	683			1,605			(1,448		)	1,775
Other	77			70			268			672
Total other income (expense)	556			1,448			(1,820		)	1,801
Income before income taxes	16,068			13,841			35,757			31,625
Income tax expense	5,740			5,179			12,813			12,078
Net income	$	10,328		$	8,662		$	22,944		$	19,547
Earnings per share:
Basic	$	0.56		$	0.48		$	1.25		$	1.07
Diluted	$	0.56		$	0.47		$	1.24		$	1.07
Shares used in earnings per share calculation:
Basic	18,459			18,236			18,395			18,228
Diluted	18,533			18,270			18,475			18,262
Dividends paid per share	$	0.18		$	0.18		$	0.36		$	0.54

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 September 30,				Nine Months Ended September 30,
	2013		2012		2013			2012
Net income	$	10,328	$	8,662	$	22,944		$	19,547
Other comprehensive income (loss):
Foreign currency translation gain (loss)	782		944		(1,147		)	1,079
Comprehensive income	$	11,110	$	9,606	$	21,797		$	20,626

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

5

US ECOLOGY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

	Nine Months Ended September 30,
	2013			2012
Cash flows from operating activities:
Net income	$	22,944		$	19,547
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property and equipment	10,792			10,222
Amortization of intangible assets	1,092			1,096
Accretion of closure and post-closure obligations	927			1,018
Unrealized foreign currency (gain) loss	1,706			(2,034		)
Deferred income taxes	(1,646		)	(785		)
Share-based compensation expense	601			564
Unrecognized tax benefits	10			10
Net (gain) loss on sale of property and equipment	12			(34		)
Changes in assets and liabilities:
Receivables	(7,218		)	(1,994		)
Income tax receivable	—			187
Other assets	(833		)	(213		)
Accounts payable and accrued liabilities	1,004			(3,485		)
Deferred revenue	2,564			(112		)
Accrued salaries and benefits	(1,541		)	875
Income tax payable	2,752			515
Closure and post-closure obligations	(989		)	(544		)
Net cash provided by operating activities	32,177			24,833
Cash flows from investing activities:
Purchases of property and equipment	(15,590		)	(12,433		)
Business acquisition, net of cash acquired	—			(10,743		)
Proceeds from sale of property and equipment	64			465
Restricted cash	—			5
Net cash used in investing activities	(15,526		)	(22,706		)
Cash flows from financing activities:
Payments on reducing revolving line of credit	(19,000		)	(17,000		)
Proceeds from reducing revolving line of credit	9,500			26,000
Proceeds from exercise of stock options	2,192			—
Deferred financing costs paid	(185		)	—
Dividends paid	(6,645		)	(9,850		)
Other	(58		)	(259		)
Net cash used in financing activities	(14,196		)	(1,109		)
Effect of foreign exchange rate changes on cash	(197		)	217
Increase in cash and cash equivalents	2,258			1,235
Cash and cash equivalents at beginning of period	2,120			4,289
Cash and cash equivalents at end of period	$	4,378		$	5,524
Supplemental Disclosures
Income taxes paid, net of receipts	$	11,467		$	12,155
Interest paid	$	547		$	616
Non-cash investing and financing activities:
Closure and post-closure retirement asset	$	550		$	956
Capital expenditures in accounts payable	$	2,526		$	973
Restricted stock issued from treasury shares	$	864		$	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 nine months ended September 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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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 September 30,					Nine Months Ended September 30,
$s in thousands	2013			2012		2013			2012
Balance, beginning of period	$	(1,301	)	$	18	$	628		$	(117	)
Foreign currency translation gain (loss) in other comprehensive income	782			944		(1,147		)	1,079
Balance, end of period	$	(519	)	$	962	$	(519	)	$	962

NOTE 3.CONCENTRATIONS AND CREDIT RISK

Major Customers

Revenue from a single customer accounted for 14% of total revenue for the three months ended September 30, 2013. No other customer accounted for more than 10% of total revenue for the three months ended September 30, 2013 or 2012. No customer accounted for more than 10% of total revenue for the nine months ended September 30, 2013 or 2012.

Receivables from a single customer accounted for approximately 18% of total trade receivables as of September 30, 2013.  No other customer accounted for more than 10% of total trade receivables as of September 30, 2013. No customer accounted for more than 10% of total trade receivables as of 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:

	September 30,			December 31,
$s in thousands	2013			2012
Trade	$	39,031		$	32,787
Unbilled revenue	1,489			1,529
Other	681			99
Total receivables	41,201			34,415
Allowance for doubtful accounts	(407		)	(468		)
Receivables, net	$	40,794		$	33,947

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NOTE 5.PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

	September 30,			December 31,
$s in thousands	2013			2012
Cell development costs	$	65,708		$	64,994
Land and improvements	18,166			14,920
Buildings and improvements	56,605			55,177
Railcars	17,375			17,375
Vehicles and other equipment	42,985			39,689
Construction in progress	18,891			12,454
Total property and equipment	219,730			204,609
Accumulated depreciation and amortization	(104,446		)	(94,817		)
Property and equipment, net	$	115,284		$	109,792

Depreciation and amortization expense for each of the three months ended September 30, 2013 and 2012 was $3.7 million and $3.4 million, respectively. Depreciation and amortization expense for the nine months ended September 30, 2013 and 2012 was $10.8 million and $10.2 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)
	Nine Months Ended
$s in thousands, except per share amounts	September 30, 2012
Pro forma combined:
Revenue	$	124,233
Net income	$	19,402
Earnings per share
Basic	$	1.06
Diluted	$	1.06

The amounts of revenue and operating income from US Ecology Michigan included in US Ecology’s consolidated statements of operations for the nine months ended September 30, 2013 were $9.4 million and $255,000, 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 nine months ended September 30, 2013 consisted of the following:

$s in thousands	Goodwill
Balance at December 31, 2012	$	23,105
Foreign currency translation	(746		)
Balance at September 30, 2013	$	22,359

9

Intangible assets consisted of the following:

$s in thousands	September 30, 2013			December 31, 2012
Amortizing intangible assets:
Developed software	$	340		$	352
Database	97			100
Customer relationships	5,128			5,269
Technology - Formulae and processes	8,831			9,144
Permits, licenses and lease	27,123			28,085
Non-compete agreements	20			20
Total amortizing intangible assets	41,539			42,970
Accumulated amortization	(4,100		)	(3,120		)
Nonamortizing intangible assets:
Permits and licenses	750			750
Tradename	165			171
Total intangible assets, net	$	38,354		$	40,771

Amortization expense for the three months ended September 30, 2013 and 2012 was $362,000 and $372,000, respectively. Amortization expense for each of the nine month periods ended September 30, 2013 and 2012 was $1.1 million.

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 September 30, 2013, the effective interest rate on the Revolving Line of Credit was 1.43%. Interest only payments are due either monthly or on the last day of any interest period, as applicable. At September 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 September 30, 2013, the effective interest rate of the Reducing Revolving Line of Credit was 1.43%.  Interest only payments are due either monthly or on the last day of any interest period, as applicable.  At September 30, 2013, $35.5 million was outstanding on the Reducing Revolving Line of Credit with $31.2 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.

10

At September 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.

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

	Three Months Ended			Nine Months Ended
$s in thousands	September 30, 2013			September 30, 2013
Closure and post-closure obligations, beginning of period	$	17,252		$	17,362
Accretion expense	314			927
Payments	(369		)	(1,539		)
Adjustments	—			550
Currency translation	(17		)	(120		)
Closure and post-closure obligations, end of period	17,180			17,180
Less current portion	(894		)	(894		)
Long-term portion	$	16,286		$	16,286

NOTE 10.INCOME TAXES

During the nine months ended September 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 September 30, 2013 was 35.7%, down from 37.4% for the three months ended September 30, 2012. Our effective tax rate for the nine months ended September 30, 2013 was 35.8%, down from 38.2% for the nine months ended September 30, 2012. The decrease for both the three and nine months ended September 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 2010 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.

11

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 pending 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 September 30, 2013 consisted of the following:

$s in thousands	Payments
2013	$	17
2014	245
2015	301
2016	310
2017	318
Thereafter	382
	$	1,573

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NOTE 12.EARNINGS PER SHARE

	Three Months Ended September 30,
$s and shares in thousands, except per share	2013				2012
amounts	Basic		Diluted		Basic		Diluted
Net income	10,328		$	10,328	$	8,662	$	8,662
Weighted average basic shares outstanding	18,459		18,459		18,236		18,236
Dilutive effect of stock options and restricted stock			74				34
Weighted average diluted shares outstanding			18,533				18,270
Earnings per share	$	0.56	$	0.56	$	0.48	$	0.47
Anti-dilutive shares excluded from calculation			174				324

	Nine Months Ended September 30,
$s and shares in thousands, except per share	2013				2012
amounts	Basic		Diluted		Basic		Diluted
Net income	$	22,944	$	22,944	$	19,547	$	19,547
Weighted average basic shares outstanding	18,395		18,395		18,228		18,228
Dilutive effect of stock options and restricted stock			80				34
Weighted average diluted shares outstanding			18,475				18,262
Earnings per share	$	1.25	$	1.24	$	1.07	$	1.07
Anti-dilutive shares excluded from calculation			197				324

NOTE 13.EQUITY

During the nine months ended September 30, 2013, option holders exercised 242,970 options with a weighted-average exercise price of $18.93 per option. Option holders exercised 127,652 of these options via net share settlement. During the nine months ended September 30, 2013, the Company issued 51,800 shares of restricted stock from our treasury stock at an average cost of $16.68 per share.

13

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 September 30, 2013 (in thousands)	Operating Disposal Facilities			Non- Operating Disposal Facilities			Corporate			Total
Revenue - Treatment and disposal	$	42,489		$	6		$	—		$	42,495
Revenue - Transportation services	10,595			—			—			10,595
Total revenue	53,084			6			—			53,090
Direct operating costs	20,847			55			—			20,902
Transportation costs	10,568			—			—			10,568
Gross profit (loss)	21,669			(49		)	—			21,620
Selling, general & administrative expense	2,611			—			3,497			6,108
Operating income (loss)	19,058			(49		)	(3,497		)	15,512
Interest income (expense), net	4			—			(208		)	(204		)
Foreign currency gain (loss)	(233		)	—			916			683
Other income	75			2			—			77
Income (loss) before income taxes	18,904			(47		)	(2,789		)	16,068
Income tax expense	—			—			5,740			5,740
Net income (loss)	$	18,904		$	(47	)	$	(8,529	)	$	10,328
Depreciation, amortization & accretion	$	4,336		$	52		$	9		$	4,397
Capital expenditures	$	2,915		$	—		$	145		$	3,060
Total assets	$	222,503		$	87		$	8,141		$	230,731

Three Months Ended September 30, 2012 (in thousands)	Operating Disposal Facilities			Non- Operating Disposal Facilities			Corporate			Total
Revenue - Treatment and disposal	$	38,578		$	5		$	—		$	38,583
Revenue - Transportation services	7,156			—			—			7,156
Total revenue	45,734			5			—			45,739
Direct operating costs	19,838			55			—			19,893
Transportation costs	7,257			—			—			7,257
Gross profit (loss)	18,639			(50		)	—			18,589
Selling, general & administrative expense	2,868			—			3,328			6,196
Operating income (loss)	15,771			(50		)	(3,328		)	12,393
Interest income (expense), net	4			—			(231		)	(227		)
Foreign currency gain (loss)	(165		)	—			1,770			1,605
Other income	68			2			—			70
Income (loss) before income taxes	15,678			(48		)	(1,789		)	13,841
Income tax expense	—			—			5,179			5,179
Net income (loss)	$	15,678		$	(48	)	$	(6,968	)	$	8,662
Depreciation, amortization & accretion	$	4,083		$	54		$	11		$	4,148
Capital expenditures	$	6,690		$	—		$	—		$	6,690
Total assets	$	215,786		$	97		$	7,847		$	223,730

14

Nine Months Ended September 30, 2013 (in thousands)	Operating Disposal Facilities		Non- Operating Disposal Facilities			Corporate			Total
Revenue - Treatment and disposal	$	117,553	$	16		$	—		$	117,569
Revenue - Transportation services	24,197		—			—			24,197
Total revenue	141,750		16			—			141,766
Direct operating costs	61,583		162			—			61,745
Transportation costs	24,091		—			—			24,091
Gross profit (loss)	56,076		(146		)	—			55,930
Selling, general & administrative expense	8,524		—			9,829			18,353
Operating income (loss)	47,552		(146		)	(9,829		)	37,577
Interest income (expense), net	10		—			(650		)	(640		)
Foreign currency gain (loss)	199		—			(1,647		)	(1,448		)
Other income	261		7			—			268
Income (loss) before income taxes	48,022		(139		)	(12,126		)	35,757
Income tax expense	—		—			12,813			12,813
Net income (loss)	$	48,022	$	(139	)	$	(24,939	)	$	22,944
Depreciation, amortization & accretion	$	12,628	$	156		$	27		$	12,811
Capital expenditures	$	15,330	$	—		$	260		$	15,590
Total assets	$	222,503	$	87		$	8,141		$	230,731

Nine Months Ended September 30, 2012 (in thousands)	Operating Disposal Facilities			Non- Operating Disposal Facilities			Corporate			Total
Revenue - Treatment and disposal	$	104,486		$	16		$	—		$	104,502
Revenue - Transportation services	14,230			—			—			14,230
Total revenue	118,716			16			—			118,732
Direct operating costs	55,997			167			—			56,164
Transportation costs	14,576			1			—			14,577
Gross profit (loss)	48,143			(152		)	—			47,991
Selling, general & administrative expense	8,310			—			9,857			18,167
Operating income (loss)	39,833			(152		)	(9,857		)	29,824
Interest income (expense), net	13			—			(659		)	(646		)
Foreign currency gain (loss)	(247		)	—			2,022			1,775
Other income	669			3			—			672
Income (loss) before income taxes	40,268			(149		)	(8,494		)	31,625
Income tax expense	—			—			12,078			12,078
Net income (loss)	$	40,268		$	(149	)	$	(20,572	)	$	19,547
Depreciation, amortization & accretion	$	12,142		$	162		$	32		$	12,336
Capital expenditures	$	12,400		$	17		$	16		$	12,433
Total assets	$	215,786		$	97		$	7,847		$	223,730

15

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 September 30,				Nine Months Ended September 30,
$s in thousands	2013		2012		2013		2012
United States	$	37,833	$	36,100	$	101,852	$	91,658
Canada	15,257		9,639		39,914		27,074
Total revenue	$	53,090	$	45,739	$	141,766	$	118,732

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

	September 30,		December 31,
$s in thousands	2013		2012
United States	$	86,851	$	81,605
Canada	66,787		68,958
Total long-lived assets	$	153,638	$	150,563

NOTE 15.SUBSEQUENT EVENT

On October 1, 2013, we declared a quarterly dividend of $0.18 per common share to stockholders of record on October 18, 2013. The dividend was paid using cash on hand on October 25, 2013 in an aggregate amount of $3.3 million.

16

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 September 30, 2013, and the related consolidated statements of operations and comprehensive income for the three-month and nine-month periods ended September 30, 2013 and 2012, and the consolidated statements of cash flows for the nine-month periods ended September 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

October 31, 2013

17

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 $9.4 million for the nine months ended September 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 nine months ended September 30, 2013 and 2012.

18

Customer		% of Treatment and Disposal Revenue (1),(2) for the Three Months Ended September 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.	45%	50%
Private Clean-up	Private sector clean-up project waste, typically Event Business.	18%	5%
Other industry	Electric utilities, chemical manufacturers, steel mill and other industrial customers not included in other categories, comprised of both Base and Event Business.	16%	19%
Refinery	Petroleum refinery customers, comprised of both Base and Event Business.	10%	8%
Government	Federal and State government clean-up project waste, comprised of both Base and Event Business.	7%	14%
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 Nine Months Ended September 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.	48%	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.	16%	19%
Private Clean-up	Private sector clean-up project waste, typically Event Business.	14%	5%
Refinery	Petroleum refinery customers, comprised of both Base and Event Business.	11%	8%
Government	Federal and State government clean-up project waste, comprised of both Base and Event Business.	7%	12%
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

19

A significant portion of our disposal revenue is attributable to discrete Event Business projects which vary widely in size, duration and unit pricing. For the three and nine month ended September 30, 2013, approximately 42% and 39%, respectively, 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.

20

RESULTS OF OPERATIONS

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

$s and shares in thousands, except per	Three Months Ended September 30,										Nine Months Ended September 30,
share amounts	2013			%		2012			%		2013			%		2012			%
Revenue	$	53,090		100.0	%	$	45,739		100.0	%	$	141,766		100.0	%	$	118,732		100.0	%
Direct operating costs	20,902			39.4	%	19,893			43.5	%	61,745			43.6	%	56,164			47.3	%
Transportation costs	10,568			19.9	%	7,257			15.9	%	24,091			16.9	%	14,577			12.3	%
Gross profit	21,620			40.7	%	18,589			40.6	%	55,930			39.5	%	47,991			40.4	%
Selling, general and administrative expenses	6,108			11.5	%	6,196			13.5	%	18,353			13.0	%	18,167			15.3	%
Operating income	15,512			29.2	%	12,393			27.1	%	37,577			26.5	%	29,824			25.1	%
Other income (expense):
Interest income	4			0.0	%	4			0.0	%	11			0.0	%	13			0.0	%
Interest expense	(208		)	-0.4	%	(231		)	-0.5	%	(651		)	-0.5	%	(659		)	-0.6	%
Foreign currency gain (loss)	683			1.4	%	1,605			3.5	%	(1,448		)	-1.0	%	1,775			1.5	%
Other	77			0.1	%	70			0.2	%	268			0.2	%	672			0.6	%
Total other income (expense)	556			1.1	%	1,448			3.2	%	(1,820		)	-1.3	%	1,801			1.5	%
Income before income taxes	16,068			30.3	%	13,841			30.3	%	35,757			25.2	%	31,625			26.6	%
Income taxes	5,740			10.8	%	5,179			11.4	%	12,813			9.0	%	12,078			10.1	%
Net income	$	10,328		19.5	%	$	8,662		18.9	%	$	22,944		16.2	%	$	19,547		16.5	%
Earnings per share:
Basic	$	0.56				$	0.48				$	1.25				$	1.07
Dilutive	$	0.56				$	0.47				$	1.24				$	1.07
Shares used in earnings per share calculation:
Basic	18,459					18,236					18,395					18,228
Dilutive	18,533					18,270					18,475					18,262
Dividends paid per share	$	0.18				$	0.18				$	0.36				$	0.54
Other Financial Data:
Adjusted EBITDA (1)	$	20,147				$	16,722				$	50,989				$	42,724

(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.

21

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

	Three Months Ended September 30,						Nine Months Ended September 30,
$s in thousands	2013			2012			2013			2012
Net income	$	10,328		$	8,662		$	22,944		$	19,547
Income tax expense	5,740			5,179			12,813			12,078
Interest expense	208			231			651			659
Interest income	(4		)	(4		)	(11		)	(13		)
Foreign currency (gain) loss	(683		)	(1,605		)	1,448			(1,775		)
Other income	(77		)	(70		)	(268		)	(672		)
Depreciation and amortization of plant and equipment	3,721			3,428			10,792			10,222
Amortization of intangibles	362			372			1,092			1,096
Stock-based compensation	238			181			601			564
Accretion and non-cash adjustment of closure & post-closure liabilities	314			348			927			1,018
Adjusted EBITDA	$	20,147		$	16,722		$	50,989		$	42,724

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

Revenue. Revenue increased 16% to $53.1 million for the third quarter of 2013, up from $45.7 million for the third quarter of 2012.  This increase reflects a 10% increase in T&D revenue and a 48% increase in transportation service revenue compared to the third quarter of 2012. The increase in transportation service revenue reflects more Event Business projects utilizing the Company’s transportation and logistics services.

We disposed of 266,000 tons of hazardous and radioactive waste in both the third quarter of 2013 and 2012. Average selling price increased 10% during the third 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 $3.2 million of total revenue during the third quarter of 2013, compared with $2.9 million in the third quarter of 2012.  Revenue from US Ecology Michigan is excluded from percentages of Base and Event Business and customer category information in the following paragraphs.

During the third quarter of 2013, T&D revenue from recurring Base Business customers was consistent with the third quarter of 2012 and comprised 58% of T&D revenue. This compared to 64% of T&D revenue in the third quarter of 2012. As discussed further below, higher T&D revenue from “other industry” and government Base Business customer categories was partially offset by lower T&D revenue from our broker and rate regulated Base Business customer categories.

Event Business revenue in the third quarter of 2013 increased 23% as compared to the same quarter in 2012 and was 42% of T&D revenue for the third quarter of 2013. This compared to 36% of T&D revenue in the third 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 “other industry” Event Business customer categories.

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

	Treatment and Disposal Revenue Growth Three Months Ended September 30, 2013 vs. Three Months Ended September 30, 2012
Private clean-up	297%
Refinery	35%
Other industry	-2%
Broker	-4%
Rate regulated	-9%
Government	-46%

22

T&D revenue from private clean-up projects increased 297% in the third quarter of 2013 compared to the third quarter of 2012.  This increase primarily reflects revenue from a nuclear fuel fabrication facility decommissioning project and an east coast clean-up project.

T&D revenue from our refinery customers increased 35% in the third quarter of 2013 compared to the third quarter of 2012. This increase primarily reflects higher disposal volumes and improved pricing on thermal recycling projects sourced directly from refinery customers.

Our other industry revenue category decreased 2% in the third quarter of 2013 compared to the third quarter of 2012 as a result of reduced shipments from this broadly diverse industrial customer category.

Our broker business decreased 4% in the third quarter of 2013 compared to the third quarter of 2012. This decrease was the result of lower shipments across the broad range of government and industry waste generators directly served by multiple broker customers, including lower volumes of brokered thermal recycling projects.

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

Government clean-up business revenue decreased 46% in the third quarter of 2013 compared to the third quarter of 2012 due to a military base clean-up project in the third quarter of 2012 and 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 third quarter of 2013 compared to $2.7 million, or 6%, of total revenue in the third quarter of 2012. Excluding transportation service revenue, T&D revenue with the USACE decreased approximately 48% in the third quarter of 2013 compared with the third 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 July 2013, USACE exercised an option to extend the Company’s base contract through July 2015.

Gross Profit. Gross profit for the third quarter of 2013 increased 16% to $21.6 million, up from $18.6 million in the third quarter of 2012. This increase primarily reflects a higher average selling price in the third quarter of 2013 compared to the third quarter of 2012. Gross margin was 41% in both the third quarter of 2013 and 2012. T&D gross margin was 51% in the third quarter of 2013 compared to 48% in the third quarter of 2012. The increase in T&D gross margin primarily reflects a more favorable service mix in the third quarter of 2013 compared to the third quarter of 2012.

Selling, General and Administrative (“SG&A”). SG&A expenses decreased to $6.1 million, or 12% of total revenue, in the third quarter of 2013 compared with $6.2 million, or 14% of total revenue, in the third quarter of 2012. The decrease primarily reflects lower business development expenses.

Interest expense. Interest expense in the third quarter of 2013 was $208,000, down from $231,000 in the third quarter of 2012, primarily reflecting lower average debt levels in the third quarter of 2013.

Foreign Currency Gain (Loss). We recognized a $683,000 non-cash foreign currency gain in the third quarter of 2013 compared with a $1.6 million non-cash foreign currency gain in the third 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 September 30, 2013, we had $40.1 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 third quarter of 2013 was $77,000, up from $70,000 in the third quarter of 2012.

Income tax expense.  Our effective tax rate for the third quarter of 2013 was 35.7%, down from 37.4% in the third 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 September 30, 2013 we had unrecognized tax benefits of $438,000 that, if recognized would favorably affect the effective tax rate.  As of September 30, 2013, we have recorded $39,000 of cumulative interest expense associated with this unrecognized tax benefit. We expect our full year effective income tax rate to be approximately 36.0%.

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NINE MONTHS ENDED SEPTEMBER 30, 2013 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 2012

Revenue. Revenue increased 19% to $141.8 million for the first nine months of 2013, up from $118.7 million for the first nine months of 2012.  This increase reflects a 13% increase in T&D revenue and a 70% increase in transportation service revenue compared to the first nine 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 742,000 tons of hazardous and radioactive waste during the first nine months of both 2013 and 2012.  Average selling price increased 13% during the first nine months of 2013 compared to the first nine months of 2012, reflecting a more favorable service mix in the first nine months of 2013.

US Ecology Michigan, which was acquired on May 31, 2012, contributed $9.4 million of total revenue during the first nine months of 2013, compared with $4.0 million during the first nine months of 2012. Revenue from US Ecology Michigan is excluded from percentages of Base and Event Business and customer category information in the following paragraphs.

During the first nine months of 2013, T&D revenue from recurring Base Business customers increased 1% compared to the first nine months of 2012 and comprised 61% of T&D revenue. This compared to 67% of T&D revenue in the first nine months of 2012. As discussed further below, the slight 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 governmental and “other industry” Base Business customer categories.

Event Business revenue in the first nine months of 2013 increased 24% compared to the first nine months in 2012 and was 39% of T&D revenue for the first nine months of 2013. This compared to 33% of T&D revenue in the first nine 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 nine months of 2013 compared to the first nine months of 2012.

	Treatment and Disposal Revenue Growth Nine Months Ended September 30, 2013 vs. Nine Months Ended September 30, 2012
Private clean-up	187%
Refinery	46%
Rate regulated	3%
Broker	2%
Other industry	-7%
Government	-36%

T&D revenue from private clean-up projects increased 187% in the first nine months of 2013 compared to the first nine months of 2012.  This increase primarily reflects revenue from a nuclear fuel fabrication facility decommissioning project and an east coast clean-up project.

T&D revenue from our refinery customers increased 46% in the first nine months of 2013 compared to the first nine 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 3% in the first nine months of 2013 compared to the first nine 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 2% in the first nine months of 2013 compared to the first nine 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 7% in the first nine months of 2013 compared to the first nine months of 2012 as a result of reduced shipments from this broadly diverse industrial customer category.

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Government clean-up business revenue decreased 36% in the first nine months of 2013 compared to the first nine months of 2012 due to reduced shipments from USACE. Event Business under our USACE contract contributed $4.5 million, or 3%, of total revenue in the first nine months of 2013 compared to $7.9 million, or 7%, of total revenue in the first nine months of 2012. Excluding transportation service revenue, T&D revenue with the USACE decreased approximately 43% in the first nine months of 2013 compared with the first nine 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 nine months of 2013.

Gross Profit. Gross profit for the first nine months of 2013 increased 17% to $55.9 million, up from $48.0 million in the first nine months of 2012. This increase primarily reflects a higher average selling price in the first nine months of 2013 compared to the first nine months of 2012. Gross margin was 39% in the first nine months of 2013, compared to 40% in the first nine months of 2012. T&D gross margin was 47% in the first nine months of 2013 compared to 46% in the first nine months of 2012 reflecting a more favorable service mix.

Selling, General and Administrative. SG&A expenses increased to $18.4 million, or 13% of total revenue, in the first nine months of 2013, compared with $18.2 million, or 15% of total revenue, in the first nine months of 2012. The increase primarily reflects a full nine 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 nine months of 2013 was $651,000, down from $659,000 in the first nine months of 2012, primarily reflecting lower average debt levels in the first nine months of 2013.

Foreign Currency Gain (Loss). We recognized $1.4 million non-cash foreign currency loss in the first nine months of 2013 compared with a $1.8 million non-cash foreign currency gain in the first nine 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. At September 30, 2013, we had $40.1 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 first nine months of 2013 was $268,000, down from $672,000 in the first nine 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 first nine months of 2012.

Income tax expense.  Our effective tax rate for the first nine months of 2013 was 35.8%, down from 38.2% in the first nine 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 September 30, 2013 we had unrecognized tax benefits of $438,000 that, if recognized would favorably affect the effective tax rate.  As of September 30, 2013, we have recorded $39,000 of cumulative interest expense associated with this unrecognized tax benefit. We expect our full year effective income tax rate to be approximately 36.0%.

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 September 30, 2013, we had $4.4 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.

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Operating Activities. For the nine months ended September 30, 2013, net cash provided by operating activities was $32.2 million. This primarily reflects net income of $22.9 million, non-cash depreciation, amortization and accretion of $12.8 million, an increase in income taxes payable of $2.8 million, an increase in deferred revenue of $2.6 million, unrealized non-cash foreign currency losses of $1.7 million and share-based compensation expense of $601,000, partially offset by an increase in receivables of $7.2 million, a decrease in deferred income taxes of $1.7 million and an increase in other working capital of $2.4 million. Impacts on net income are due to the factors discussed above under Results of Operations.  The increase in income taxes payable is primarily attributable to the timing of income tax payments. The increase in receivables is primarily attributable to the timing of the treatment and disposal of waste associated with a significant east coast clean-up project.

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

For the nine months ended September 30, 2012, net cash provided by operating activities was $24.8 million. This primarily reflects net income of $19.5 million and depreciation and amortization and accretion of $12.3 million, partially offset by a decrease in accrued liabilities of $3.5 million, unrealized foreign currency gains of $2.0 million and an increase in receivables of $2.0 million. The decrease in accrued liabilities is primarily attributable to the payment of fiscal year 2011 accrued customer refunds related to our rate-regulated business in Richland, Washington.

Investing Activities. For the nine months ended September 30, 2013, net cash used in investing activities was $15.5 million, primarily related to capital expenditures. Significant capital projects included the purchase of land for future expansion of our Robstown, Texas location, construction of additional disposal capacity at our Beatty, Nevada and Blainville, Quebec, Canada locations, relocation of administrative offices at our Beatty, Nevada location to accommodate disposal capacity expansion and equipment purchases and infrastructure upgrades at all of our operating facilities.

For the nine months ended September 30, 2012, net cash used in investing activities was $22.7 million, primarily related to our acquisition of US Ecology Michigan for $10.7 million, net of cash acquired, and capital expenditures of $12.4 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 nine months ended September 30, 2013, net cash used in financing activities was $14.2 million, consisting primarily of $9.5 million of net repayments under the Credit Agreement and $6.6 million of dividend payments to our stockholders, partially offset by $2.2 million of proceeds from stock option exercises.

For the nine months ended September 30, 2012, net cash provided by financing activities was $1.1 million, consisting primarily of $9.9 million of dividends paid to our stockholders, partially offset by net borrowings under the Credit Agreement of $9.0 million incurred primarily to finance the US Ecology Michigan acquisition.

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 September 30, 2013 consisted of the following:

$s in thousands	Payments
2013	$	17
2014	245
2015	301
2016	310
2017	318
Thereafter	382
	$	1,573

There were no other material changes in the amounts of our contractual obligations and guarantees during the nine months ended September 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.

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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 September 30, 2013, we had $35.5 million of borrowings on the Reducing Revolving Line of Credit bearing an interest rate of 1.43%.  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 $35.5 million under our Credit Agreement at September 30, 2013, if market rates used to calculate interest expense were to average 1% higher in the next twelve months, our annual interest expense would increase by approximately $355,000.

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 nine months ended September 30, 2013, Stablex transacted approximately 63% 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.

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 September 30, 2013, we had $40.1 million of intercompany loans outstanding between Stablex and US Ecology. During the nine months ended September 30, 2013, the CAD weakened as compared to the USD resulting in a $1.6 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 September 30, 2013, a $0.01 CAD increase or decrease in currency rate compared to the USD at September 30, 2013 would have generated a gain or loss of approximately $401,000 for the nine months ended September 30, 2013.

We had a total pre-tax foreign currency gain of $683,000 for the three months ended September 30, 2013 and a total pre-tax foreign currency loss of $1.4 million for the nine months ended September 30, 2013.  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 September 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 pending 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.

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.

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

None.

ITEM 3.DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.OTHER INFORMATION

None.

ITEM 6.EXHIBITS

10.1	Executive Employment Agreement, dated September 7, 2013, between Jeffrey R. Feeler and US Ecology, Inc.*
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 September 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: October 31, 2013	/s/ Eric L. Gerratt
	Eric L. Gerratt
	Executive Vice President, Chief Financial Officer and Treasurer

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EX-10.1

EXHIBIT 10.1

EXECUTIVE EMPLOYMENT AGREEMENT

This EXECUTIVE EMPLOYMENT AGREEMENT (this “Employment Agreement” or this “Agreement”) is made and entered into effective as of the 1st day of June, 2013 (the “Effective Date”), by and between US ECOLOGY, INC., a Delaware corporation (the “Company”), and JEFFREY R. FEELER (“Executive”).  The Company and Executive are sometimes collectively referred to herein as the “Parties,” and individually, as a “Party.”

WHEREAS, immediately prior to the Effective Date, Executive rendered valuable services to the Company in the capacity of President and Chief Operating Officer, pursuant to an Employment Agreement, dated January 1, 2010 (the “Prior Agreement”); and

WHEREAS, commencing on May 30, 2013, Executive became the President and Chief Executive Officer of the Company; and

WHEREAS, the Parties desire to enter into this Agreement, to continue Executive’s employment, on the terms and conditions hereinafter set forth, to reflect, inter alia, Executive’s status as President and Chief Executive Officer.

NOW, THEREFORE, in consideration of the premises, the mutual promises, covenants and conditions herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto, intending to be legally bound hereby, agree as follows:

1.0.         Employment.

Section 1.01. Employment. The Company hereby employs Executive, and Executive hereby accepts employment with the Company, all upon the terms and subject to the conditions set forth in this Employment Agreement, effective as of the Effective Date first set forth above.

Section 1.02. Term of Employment. The term of employment of Executive by the Company pursuant to this Employment Agreement shall be for the period commencing on the Effective Date and ending May 31, 2016 (the “Employment Term”), or such earlier date that Executive’s employment is terminated in accordance with the provisions of this Employment Agreement; provided, however, that the Employment Term shall automatically renew for additional one (1) year periods if neither the Company nor Executive has notified the other in writing of its or his intention not to renew this Employment Agreement on or before 60 days prior to the expiration of the Employment Term (including any renewal(s) thereof).

Section 1.03. Capacity and Duties. Executive is and shall be employed in the capacity of President and Chief Executive Officer of the Company and its subsidiaries as the senior executive with overall responsibility for Company performance, and shall have such other duties, responsibilities and authorities as may be assigned to him from time to time by the Board of Directors of the Company (the “Board”), which are not materially inconsistent with Executive’s positions with the Company.  Except as otherwise herein provided, Executive shall devote his entire business time, best efforts and attention to promote and advance the business of the Company and its subsidiaries and to perform diligently and faithfully all the duties, responsibilities and obligations of Executive to be performed by him under this Employment Agreement.  If after the Effective Date Employee becomes a member of the Board, then upon termination of Employee’s employment for any reason, unless otherwise requested by the Board, Employee will be deemed to have resigned from the Board (and all other positions held at the Company and its affiliates) voluntarily, without any further action by Employee, as of the end of Employee’s employment and Employee, at the Board’s request, will execute any documents necessary to reflect his resignation.

Section 1.04. Place of Employment. Executive’s principal place of work shall be the main corporate office of the Company, currently located in Boise, Idaho; provided, however, that the location of the Company and any of its offices may be moved from time to time in the discretion of the Board.

Section 1.05. No Other Employment. During the Term, Executive shall not be employed in any other business activity, whether or not such activity is pursued for gain, profit or other pecuniary advantage; provided, however, that this restriction shall not be construed as preventing Executive from (i) participating in charitable, civic, educational, professional, community or industry affairs; (ii) sitting on one outside board of directors for a public or private company that does not compete with the Company, with the prior concurrence of the Board that the required time commitment with respect to such position is acceptable; and (iii) investing his personal assets in a business which does not compete with the Company or its subsidiaries or with any other company or entity affiliated with the Company, where the form or manner of such investment will not require services on the part of Executive in the operation of the affairs of the business in which such investment is made and in which his participation is solely that of a passive investor or advisor, so long as the activities in clauses (i), (ii) and (iii), above, do not materially interfere with the performance of Executive’s duties hereunder or create a potential business conflict or the appearance thereof.

Section 1.06. Adherence to Standards. Executive shall comply with the written policies, standards, rules and regulations of the Company from time to time established for all executive officers of the Company consistent with Executive’s position and level of authority.

Section 1.07. Review of Performance. The Board or designated committee of the Board shall periodically review and evaluate with Executive his performance under this Employment Agreement.

2.0.         Compensation.

During the Employment Term, subject to all the terms and conditions of this Employment Agreement and as compensation for all services to be rendered by Executive hereunder, the Company shall pay to or provide Executive with the following:

Section 2.01. Base Salary. During the Employment Term, the Company shall pay to Executive an annual base salary (“Base Salary”) in an amount not less than Three Hundred Twenty-Five Thousand and No/100 Dollars ($325,000.00).  Such Base Salary shall be payable in accordance with the regular payroll practices and procedures of the Company.

Section 2.02. Incentive Pay. Executive shall be eligible to participate in any cash incentive or bonus plans of the Company which are in effect from time to time, including the annual cash incentive payment opportunity granted to Executive under the Company’s Management Incentive Plan (“MIP” and together with any other cash incentive or bonus plans of the Company, the “Cash Incentive Plans”), subject to the terms and conditions thereof, at a 75% of Base Salary at a 100% of MIP target basis, which such MIP target shall be set annually by the Board.  Anything to the contrary in this Agreement notwithstanding, the Company reserves the right to modify or terminate any or all of its Cash Incentive Plans at any time.  In the event of any inconsistency between the terms of this Employment Agreement and the terms of any Cash Incentive Plan, the Cash Incentive Plan shall govern and control.

Section 2.03. Paid Time Off and Other Benefits. Executive shall be entitled to five (5) weeks Paid Time Off (“PTO”), and shall have the right, on the same basis as other members of senior management of the Company, to participate in any and all employee benefit plans and programs of the Company, including medical plans, insurance plans and other benefit plans and programs as shall be, from time to time, in effect for executive employees and senior management personnel of the Company. Such participation shall be subject to the terms of the applicable plan documents, generally applicable Company policies and the discretion of the Board or any administrative or other committee provided for in, or contemplated by, each such plan or program.  Anything to the contrary in this Agreement notwithstanding, the Company reserves the right to modify or terminate such benefit plans and programs at any time.

Section 2.04. Expenses. The Company shall reimburse Executive for all reasonable, ordinary and necessary expenses including, but not limited to, automobile and other business travel and customer and business entertainment expenses incurred by him in connection with his employment in accordance with the Company’s expense reimbursement policy; provided, however, Executive shall render to the Company a complete and accurate accounting of all such expenses in accordance with the substantiation requirements of the Internal Revenue Code of 1986, as amended (the “Code”).  Executive’s right to reimbursement hereunder may not be liquidated or exchanged for any other benefit, the amount of expenses eligible for reimbursement hereunder in a calendar year shall not affect the amount of expenses eligible for reimbursement hereunder in any other calendar year, and Executive shall be reimbursed for eligible expenses no later than the close of the calendar year following the year in which Executive incurs the applicable expense.

3.0.         Equity Ownership.

Section 3.01. Equity Ownership Requirement. In order to more closely align Executive’s interest in the Company with that of its stockholders, Executive and the Company agree as follows: (i) Within thirty-six (36) months of the Effective Date, Executive agrees to maintain a total equity ownership position in the Company with an aggregate value of not less than Nine Hundred Seventy-Five Thousand and No/100 Dollars ($975,000.00) (three times his annual Base Salary as of the Effective Date, such dollar amount to be calculated based on the greater of cost basis, grant date value or market; and (ii) Executive agrees to maintain such total equity ownership position throughout the remainder Employment Term (the foregoing requirements shall be collectively referred to as the “Equity Ownership Requirement”). Granted and unvested time-vesting restricted stock shall be counted towards the Equity Ownership Requirement.

Section 3.02. Failure to Maintain Equity Ownership. If, during the Employment Term, Executive shall fail to maintain the Equity Ownership Requirement, Executive shall have 90 days within open trading windows to cure such failure by acquiring additional shares of common stock in the Company, at Executive’s sole cost and expense.

4.0.         Termination of Employment.

Section 4.01. Termination of Employment. Executive’s employment and this Employment Agreement may be terminated prior to expiration of the Employment Term as follows (with the date of termination of Executive’s employment hereunder being referred to hereinafter as the “Termination Date”):

(a) By either Party by delivering 60 days’ prior written notice of non-renewal as set forth in the Section 1.02 (Term of Employment);

(b) Upon no less than 30 days’ written notice from the Company to Executive at any time without Cause (as hereinafter defined) and other than due to Executive’s death or Disability, subject to the provisions of Section 5.02 (Termination by the Company Without Cause or by the Executive For Good Reason);

(c) By the Company for Cause (as hereinafter defined) immediately upon written notice stating the basis for such termination;

(d) Due to the death or Disability (as hereinafter defined) of Executive;

(e) By Executive at any time with or without Good Reason (as hereinafter defined) upon 30 days’ written notice from Executive to the Company (or such shorter period to which the Company may agree; and

(f) Upon the mutual agreement of the Company and Executive.

Section 4.02. Effect of Termination. In the event of termination of Executive’s employment with the Company for any reason, or if Executive is required by the Board, Executive agrees to resign, and shall automatically be deemed to have resigned, from any offices (including any directorship) Executive holds with the Company or any of its subsidiaries effective as of the Termination Date or, if applicable, effective as of a date selected by the Board.

5.0.         Payments and Benefits Upon Termination of Employment.

Section 5.01. Termination by the Company For Cause or by the Executive Without Good Reason. If Executive’s employment and this Employment Agreement are terminated by the Company for Cause or by Executive without Good Reason, the Company shall pay Executive the Accrued Obligations (as hereinafter defined) (other than, however, any amounts due under any Cash Incentive Plan which shall be forfeited pursuant to the terms of such plan), in a single, lump-sum payment within 45 days following such termination.

Section 5.02. Termination by the Company Without Cause or by the Executive For Good Reason. If Executive’s employment and this Employment Agreement are terminated by the Company without Cause or if Executive terminates his employment and this Employment Agreement for Good Reason, the Company shall pay Executive the Accrued Obligations in a single, lump-sum payment within 45 days following such termination or, in the case of a Cash Incentive Plan payment, according to the terms of such plan.  In addition, subject to Sections 6.0, 7.0 and 8.0, Executive shall be entitled to receive the following: (i) an amount equal to the greater of the Base Salary payable to Executive for the remainder of the Employment Term or one year’s Base Salary (“Severance Payment”), which shall be payable as provided below; (ii) continued vesting of granted stock options following the Termination Date for the shorter of a period of one (1) year or the original expiration date of such option; (iii) continued vesting of restricted stock grants for a period of one (1) year following the Termination Date; and (iv) continued medical, hospitalization, life insurance and disability benefits to which Executive was entitled at the Termination Date (any of which shall, to the extent required to avoid subjecting Executive to an additional tax under Section 409A of the Code or as otherwise determined by the Company in its discretion, be structured so as to require that Executive pay the premiums for such benefits on a timely basis, in which case the Company shall reimburse Executive for such premiums in accordance with Section 7.02 so that Executive is made whole on an after-tax) for a period of 24 months following the Termination Date (or until Executive receives similar or comparable coverage from a new employer); provided, however, that the Company may unilaterally amend the foregoing clause (iv) or eliminate the benefit provided thereunder to the extent it deems necessary to avoid the imposition of excise taxes, penalties or similar charges on the Company or any of its subsidiaries or affiliates, including, without limitation, under Code Section 4980D. All such additional payments and benefits under this Section 5.02 shall be conditional on Executive’s timely execution and non-revocation of the Release (as defined in Section 7.0) and Executive’s continued compliance with Section 11.0 (Return of Property), Section 14.0 (Confidentiality), Section 15.0 (Work Product Assignment), and Section 16.0 (Covenant Not to Compete). Payment of the

Severance Payment shall be made in bi-weekly installments, in accordance with the regular payroll practices and procedures of the Company commencing on the first regularly scheduled payroll date occurring after Executive’s Release becomes effective; provided, however, that if the period during which Executive can consider and revoke the Release begins in one calendar year and ends in the subsequent calendar year, then payment of the Severance Payment shall commence on the later of (a) the first regularly scheduled payroll date occurring after Executive’s Release becomes effective, and (b) the first regularly scheduled payroll date occurring in the subsequent calendar year.  The first such payment shall include any installments of the Severance Payment that would have been made on previous payroll dates but for the requirement that Executive execute a Release.  The period, if any, during which Executive and his spouse and children are eligible to continue their coverage under the Company’s group health plans pursuant to Section 4980B of the Code (“COBRA”) shall run simultaneously with the period specified in clause (iv) (provided that nothing in such clause (iv) shall be deemed to extend such COBRA continuation period beyond the minimum period required by applicable law). For the avoidance of doubt, a termination of employment pursuant to Section 4.01(a) by notice of non-renewal by the Company for any reason other than Cause, shall be deemed a termination of employment by the Company without Cause for purposes of this Section 5.02.

Section 5.03. Termination Due to Death. If Executive’s employment and this Employment Agreement are terminated due to Executive’s death, the Company shall pay the estate of Executive the Accrued Obligations in a single, lump-sum payment within 45 days following such termination or, in the case of a Cash Incentive Plan payment, according to the terms of such plan.

Section 5.04. Termination Due to Disability. If Executive’s employment and this Employment Agreement are terminated due to his Disability, the Company shall pay Executive the Accrued Obligations in a single, lump-sum payment within 45 days following such termination or, in the case of a Cash Incentive Plan payment, according to the terms of such plan.. In addition, Executive will be eligible to participate in the Company’s Long-Term Disability Plan, on a basis no less favorable to Executive than other senior executives of the Company.

Section 5.05. Retirement. If Executive’s employment and this Employment Agreement are terminated by virtue of Executive’s Retirement prior to the expiration of the Employment Term, the Company shall pay Executive the Accrued Obligations in a single, lump-sum payment within 45 days following such termination or, in the case of a Cash Incentive Plan payment, according to the terms of such plan.

6.0.         Payment and Benefits Upon Change of Control.

Subject to Sections 7.0 and 8.0, upon a Change of Control of the Company (as hereinafter defined) during the Employment Term and subsequent termination from the Company under Section 5.02 within 24 months after such Change of Control (including, for purposes of this Section, a termination for Good Reason), Executive shall receive, in lieu of the Severance Payment, a payment equal to two times the sum of (i) his annual Base Salary; and (ii) the greatest of (a) any earned but unpaid amount due under any Cash Incentive Plan (as determined by the terms of the Cash Incentive Plan); (b) the Executive’s target incentive amount under the Cash Incentive Plan for which a payment is earned, but unpaid; and (c) the Cash Incentive Plan payment received (if any) for the fiscal year immediately preceding the Cash Incentive Plan year in Subsection (ii)(a) herein (collectively, the “Change of Control Payment”).  Such Change of Control Payment shall be paid in a single lump-sum payment within 45 days after Executive’s Release becomes effective; provided, however, that if the period during which Executive can consider and revoke the Release begins in one calendar year and ends in the subsequent calendar year, then the lump sum will be paid in the subsequent calendar year (and in any event by March 15 of such year), regardless of when Executive’s Release becomes effective, and even if payment occurs more than 45 days after Executive’s Release becomes effective.  However, if a portion of the Change of Control Payment is based on (ii)(a) or (ii)(b) of this Section 6.0, such amount shall be paid according to the terms of the corresponding Cash Incentive Plan.  The Executive shall be entitled to the other benefits set forth in Section 5.02 (other than the Severance Payment), except that all unvested stock options and restricted stock shall become fully vested upon the Termination Date under this Section 6.0; provided, however, that if unvested stock options and restricted stock held by the Executive are not continued, substituted for or assumed by the successor company in connection with a Change of Control, such awards shall immediately vest upon the Change of Control. In the event of an inconsistency between this Section 6.0 and Section 5.02, this Section 6.0 shall govern and control.

7.0.         Release.

Executive’s entitlement to the payments and benefits described in the second sentence of Section 5.02 and in Section 6.0 is subject to and conditioned upon Executive’s timely execution, without subsequent revocation, of a release of claims (in a form satisfactory to the Company) in favor of the Company and its subsidiaries and affiliates (the “Release”); provided, however, that notwithstanding the foregoing, the Release is not intended to and will not waive the Executive’s rights:  (i) to indemnification pursuant to any applicable provision of the Company’s Bylaws or Certificate of Incorporation, as amended, pursuant to any written indemnification agreement between the Executive and the Company, or pursuant to applicable law; (ii) to vested benefits or payments specifically to be provided to the Executive under this Agreement or any Company

employee benefit plans or policies; or (iii) respecting any claims the Executive may have solely by virtue of the Executive’s status as a stockholder of the Company.  The Release also shall not impose any restrictive covenant on the Executive’s conduct post-termination that the Executive had not agreed to prior to the Executive’s termination in this Agreement or otherwise) or include claims that an employee cannot lawfully release through execution of a general release of claims.

To be timely, the Release must become effective (i.e., Executive must sign it and any revocation period must expire without Executive revoking the Release) within 60 days, or such shorter period specified in the Release, after Executive’s date of termination of employment.  If the Release does not become effective within such time period, then Executive shall not be entitled to such payments and benefits.

8.0.         Compliance With Section 409A.

Section 8.01. General. The provisions of this Employment Agreement are intended to comply with the requirements of Section 409A of the Code and any final regulations and official guidance promulgated thereunder (“Section 409A”) or an exemption or exclusion therefrom and, with respect to amounts that are subject to Section 409A, shall in all respects be interpreted and administered in accordance with Section 409A. Any payments that qualify for the “short-term deferral” exception or another exception under Section 409A shall be paid under the applicable exception. Each payment of compensation under this Employment Agreement shall be treated as a separate payment of compensation for purposes of Section 409A and a right to a series of installment payments under this Employment Agreement (including pursuant to Section 5.02) shall be treated as a right to a series of separate and distinct payments. All payments to be made upon a termination of employment under this Employment Agreement may only be made upon a “separation from service” under Section 409A. In no event may Executive, directly or indirectly, designate the calendar year of any payment under this Plan.

Section 8.02. In-Kind Benefits and Reimbursements. Notwithstanding anything to the contrary in this Employment Agreement, all reimbursements and in-kind benefits provided hereunder shall be made or provided in accordance with the requirements of Section 409A, including, where applicable, the requirement that (a) any reimbursement is for expenses incurred during Executive’s lifetime (or during a shorter period of time specified herein); (b) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year, except, if such benefits consist of the reimbursement of expenses referred to in Section 105(b) of the Code, a maximum, if provided under the terms of the plan providing such medical benefit, may be imposed on the amount of such reimbursements over some or all of the period in which such benefit is to be provided to Executive as described in Treasury Regulation Section 1.409A-3(i)(1)(iv)(B); (c) the reimbursement of an eligible expense will be made no later than the last day of the calendar year following the calendar year in which the expense is incurred, provided that reimbursement shall be made only if Executive has submitted an invoice for such expenses at least ten (10) days before the end of the calendar year following the calendar year in which such expenses were incurred; and (d) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

Section 8.03. Delay of Payments. Notwithstanding any other provision of this Employment Agreement to the contrary, if Executive is considered a “specified employee” for purposes of Section 409A (as determined in accordance with the methodology established by the Company as in effect on the date of termination of employment), any payment that constitutes nonqualified deferred compensation within the meaning of Section 409A that is otherwise due to Executive hereunder during the six-month period following Executive’s separation from service (as determined in accordance with Section 409A) on account of Executive’s separation from service shall be accumulated and paid to Executive on the first business day after the date that is six months following Executive’s separation from service (the “Delayed Payment Date”). The Executive shall be entitled to interest (at a per annum rate equal to the highest rate of interest applicable to six-month non-callable certificates of deposit with daily compounding offered by the following institutions: Citibank, N.A., Wells Fargo Bank, N.A. or Bank of America, on the date of such separation from service) on any cash payments so delayed from the scheduled date of payment to the Delayed Payment Date. If Executive dies during the postponement period, the amounts and entitlements delayed on account of Section 409A shall be paid to the personal representative of Executive’s estate on the first to occur of the Delayed Payment Date or thirty (30) days after the date of Executive’s death.

Section 8.04. Cooperation. Executive and the Company agree to work together in good faith to consider amendments to this Employment Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to Executive under Section 409A.

9.0.         Limitation on Payments.

In the event that the severance and other benefits provided for in this Agreement or otherwise payable to Executive (i) constitute “parachute payments” within the meaning of Section 280G of the Code and (ii) but for this Section 9.0, would be subject to the excise tax imposed by Section 4999 of the Code, then Executive’s severance benefits under the foregoing clause (i) will be either:

(a) delivered in full; or

(b) delivered as to such lesser extent as would result in no portion of such severance benefits being subject to excise tax under Section 4999 of the Code,

Whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the excise tax imposed by Section 4999, results in the receipt by Executive on an after-tax basis, of the greatest amount of severance benefits, notwithstanding that all or some portion of such severance benefits may be taxable under Section 4999 of the Code. If a reduction in severance and other benefits constituting “parachute payments” is necessary so that benefits are delivered to a lesser extent, reduction shall occur in the following order: (i) reduction of cash payments; (ii) cancellation of awards granted “contingent on a change in ownership or control” (within the meaning of Code Section 280G); (iii) cancellation of accelerated vesting of equity awards; and (iv) reduction of employee benefits; provided that the reduction shall be made in a manner consistent with the requirements of Section 409A of the Code. In the event that acceleration of vesting of equity award compensation is to be reduced, such acceleration of vesting shall be cancelled in the reverse order of the date of grant of the Executive’s equity awards. Unless the Company and Executive otherwise agree in writing, any determination required under this Section 9.0 will be made in writing by an independent firm (the “Firm”) immediately prior to Change of Control, whose determination will be conclusive and binding upon the Executive and the Company for all purposes. For purposes of making the calculations required by this Section 9.0, the Firm may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and Executive will furnish to the Firm such information and documents as the Firm may reasonably request in order to make a determination under this Section 9.0. The Company will bear all costs the Firm may reasonably incur in connection with any calculations contemplated by this Section.

10.0.       Definitions.

In addition to the words and terms elsewhere defined in this Employment Agreement, certain capitalized words and terms used herein shall have the meanings given to them by the definitions and descriptions in this Section 10.0, unless the context or use indicates another or different meaning or intent, and such definition shall be equally applicable to both the singular and plural forms of any of the capitalized words and terms herein defined.  The following words and terms are defined terms under this Employment Agreement:

(a) “Accrued Obligations” shall include (i) any unpaid Base Salary through the Termination Date and any accrued PTO in accordance with the Company’s policy; (ii)  reimbursement for any un-reimbursed business expenses incurred through the Termination Date; and (iii) all other payments, benefits or fringe benefits to which Executive may be entitled under the terms of any applicable compensation arrangement or benefit, equity or fringe benefit plan or program or grant or this Employment Agreement. Accrued Obligations shall also include any cash incentive earned under any Cash Incentive Plan and shall be paid on a pro-rata basis based on days employed during the fiscal year of such plan if any. For the sake of clarity and by way of example only, if the Executive is employed for 270 days of a fiscal year and the management incentive plan in place at the time pays out 100% of target, the Executive would be owed 74% (270/365) of any incentive payments to which he would have been entitled had his employment not been terminated.  Such payments shall be made in accordance with the terms of any Cash Incentive Plan in effect at the time, except that any requirement that the recipient must be an employee at the time of payment shall be waived by the Company under this policy.

(b) A termination for “Cause” shall mean a termination of this Employment Agreement by reason of a determination by two-thirds (2/3) of the members of the Board (excluding, for such purposes, Executive, if Executive is a member of the Board) voting that Executive:

(i) Has engaged in willful neglect (other than neglect resulting from his incapacity due to physical or mental illness) or willful misconduct in the performance of his duties for the Company under this Employment Agreement;

(ii) Has engaged in willful conduct the consequences of which are materially adverse to the Company, monetarily or otherwise;

(iii) Has materially breached the terms of this Employment Agreement, and such breach persisted after notice thereof from the Company and a reasonable opportunity to cure; or

(iv) Has been convicted of (or has plead guilty or no contest to) any felony other than a traffic violation.

(c) A “Change of Control” shall be deemed to have occurred upon:

(i) The consummation of a reorganization, merger, statutory share exchange or consolidation or similar transaction involving the Company (each, a “Business Combination”), unless, following such Business Combination, all or substantially all of the individuals and entities that were the beneficial owners of the combined voting power of the Company’s outstanding securities immediately prior to such Business Combination beneficially own, directly or indirectly, at least 60% of the combined voting power of the then-outstanding securities of the entity resulting from such Business Combination in substantially the same proportions as their ownership of the combined voting power of the Company’s outstanding securities immediately prior to the Business Combination; provided, however, that a public offering of the Company’s securities shall not constitute a Business Combination;

(ii) The sale, transfer, or other disposition of all or substantially all of the Company’s assets; or

(iii) Any transaction as a result of which any person is the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than 25% of the total voting power represented by the Company’s then outstanding voting securities. For purposes of this subparagraph (iii), the term “person” shall have the same meaning as when used in sections 13(d) and 14(d) of the Exchange Act, but shall exclude (x) a trustee or other fiduciary holding securities under an Executive benefit plan of the Company or of a subsidiary and (y) a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of the common stock of the Company.

(iv) A change in the composition of the Board in any two-year period as a result of which fewer than a majority of the directors are Incumbent Directors. “Incumbent Directors” shall mean directors who either (a) are directors of the Company as of the date hereof or (b) are elected, or nominated for election, to the Board with the affirmative votes (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for election as a director without objection to such nomination) of at least a majority of the Incumbent Directors at the time of such election or nomination (but shall not include an individual whose election or nomination is in connection with an actual or threatened proxy contest relating to the election of directors of the Company).

(d) The term “Disability” shall be as defined in the Company’s Long-Term Disability Plan.

(e) The term “Good Reason” shall mean the occurrence of any of the following without Executive’s prior written consent during the Employment Period, which occurrence continues for 10 days after written notice thereof from Executive to the Board:

(i) Any material diminution or adverse change in Executive’s position, status, title, authorities or responsibilities, office or duties under this Employment Agreement which represents a demotion from such position, status, title, authorities or responsibilities, office or duties which are materially inconsistent with his position, status, title, authorities or responsibilities, office or duties set forth in this Employment Agreement, or any removal of Executive from, or failure to appoint, elect, reappoint or reelect Executive to, any of his positions, except in connection with the termination of his employment with or without Cause, or as a result of his death or Disability.

(ii) The exclusion of Executive in any incentive, bonus or other compensation plan in which Executive participated at the time that this Employment Agreement is executed, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to the failure to continue such plan, or the failure by the Company to continue Executive’s participation therein, or any action by the Company which would directly or indirectly materially reduce his participation therein or reward opportunities thereunder; provided, however, that Executive continues to meet all eligibility requirements thereof. Notwithstanding the foregoing, this provision shall not apply to the exclusion of Executive in any incentive, bonus or other compensation plan in which Executive participated at the time that this Employment Agreement is executed to the extent that such termination is required by law;

(iii) The failure by the Company to include or continue Executive’s participation in any material employee benefit plan (including any medical, hospitalization, life insurance or disability benefit plan in which Executive participates or in which other Company executives participate), or any material fringe benefit or prerequisite enjoyed by him (or enjoyed by other Company executives) unless an equitable arrangement (embodied in an ongoing substitute or alternative plan, if applicable) has been made with respect to the failure to include Executive in such plan, or the failure by the Company to continue Executive’s participation therein, or any action by the Company which would directly or indirectly materially reduce his participation therein or reward opportunities thereunder, or

the failure by the Company to provide him with the benefits to which he is entitled under this Employment Agreement; provided, however, that Executive continues to meet all eligibility requirements thereof.  Notwithstanding the foregoing, this provision shall not apply to the exclusion of Executive in any Executive benefit plan in which Executive participated at the time that this Employment Agreement is executed to the extent that such termination is required by law, or to such failure to continue any Executive benefit plan or fringe benefit, or Executive’s participation therein or reward opportunity thereunder if such failure to continue such plan or benefit is applicable to the Company’s executive officers and/or Executives generally; or

(iv) Any material breach by the Company of any provision of this Employment Agreement.

(v) The movement of main corporate office of the Company beyond a fifty (50) mile radius from Boise, Idaho.

Notwithstanding any other provision of this Agreement to the contrary, Executive shall not be deemed to have terminated his employment for Good Reason unless (i) Executive notifies the Board in writing of the condition that Executive believe constitutes Good Reason within 90 days of the initial existence thereof (which notice specifically identifies such condition and the details regarding its existence), (ii) the Company fails to remedy such condition within 30 days after the date on the Board receives such notice (the “Remedial Period”), and (iii) Executive terminates employment with the Company (and its subsidiaries and affiliates) within 60 days after the end of the Remedial Period.  The failure by Executive to include in the notice any fact or circumstance that contributes to a showing of Good Reason shall not waive any right of Executive hereunder or preclude Executive from asserting such fact or circumstance in enforcing his or her rights hereunder.

(f) The term “Retirement” shall mean retirement upon “normal retirement age” as defined in the Company’s 401(k) retirement plan.

11.0.       Return of Property.

Executive agrees, upon the termination of his employment with the Company, to return all physical, computerized, electronic or other types of records, documents, proposals, notes, lists, files and any and all other materials, including without limitation, computerized and/or electronic information that refers, relates or otherwise pertains to the Company and/or its subsidiaries, and any and all business dealings of said persons and entities.  In addition, Executive shall return to the Company all property and equipment that Executive has been issued during the course of his employment or which he otherwise currently possesses, including but not limited to, any computers, cellular phones, personal digital assistants, pagers and/or similar items.  Executive shall immediately deliver to the Company any such physical, computerized, electronic or other types of records, documents, proposals, notes, lists, files, materials, property and equipment that are in Executive’s possession.  Executive further agrees that he will immediately forward to the Company any business information regarding the Company and/or its subsidiaries that has been or is inadvertently directed to Executive following his last day of employment with the Company.  The provisions of this Section 11.0 are in addition to any other written agreements on this subject that Executive may have with the Company and/or its subsidiaries, and are not meant to and do not excuse any additional obligations that Executive may have under such agreements.

12.0.       Notices.

For the purposes of this Employment Agreement, notices and all other communications provided for hereunder shall be in writing and shall be deemed to have been duly given when personally delivered or sent by certified mail, return receipt requested, postage prepaid, or by expedited (overnight) courier with established national reputation, shipping prepaid or billed to sender, in either case addressed to the respective addresses last given by each Party to the other (provided that all notices to the Company shall be directed to the attention of the Chief Executive Officer) or to such other address as either Party may have furnished to the other in writing in accordance herewith. All notices and communication shall be deemed to have been received on the date of delivery thereof, or on the second day after deposit thereof with an expedited courier service, except that notice of change of address shall be effective only upon receipt.  Notices shall be addressed as follows:

If to the Company:

251E. Front St., Suite 400, Boise, Idaho 83702.

If to the Executive:

5777 S. Horseshoe Place, Boise, Idaho 83716.

13.0.       Life Insurance.

The Company may, at any time after the execution of this Employment Agreement, apply for and procure as owner and for its own benefit, life insurance on Executive, in such amounts and in such form or forms as the Company may determine.  The Executive shall, at the request of the Company, submit to such medical examinations, supply such information, and execute such documents as may be required by the insurance company or companies to whom the Company has applied for such insurance.  Executive hereby represents that to his knowledge he is in good physical and mental condition and is not under the influence of alcohol, drugs or similar substance.

14.0.       Confidentiality.

Executive agrees not to disclose or reveal to any person or entity outside the Company any secret or confidential information concerning any Company product, process, equipment, machinery, design, formula, business, or other activity (collectively, “Confidential Information”) without prior permission of the Company in writing. Confidential Information shall not include any information which is in the public domain or becomes publicly known through no wrongful act on the part of Executive or breach of this Employment Agreement.  Executive acknowledges that the Confidential Information is vital, sensitive, confidential and proprietary to the Company. The obligation to protect the secrecy of such information continues after employment with Company may be terminated.  In furtherance of this agreement, Executive acknowledges that all Confidential Information which Executive now possesses, or shall hereafter acquire, concerning and pertaining to the business and secrets of the Company and all inventions or discoveries made or developed, or suggested by or to Executive during said term of employment relating to Company’s business shall, at all times and for all purposes, be regarded as acquired and held by Executive in his fiduciary capacity and solely for the benefit of Company.

15.0.       Work Product Assignment.

Executive agrees that all inventions, innovations, improvements, technical information, systems, software developments, methods, designs, analyses, drawings, reports, service marks, trademarks, trade names, logos and all similar or related information (whether patentable or unpatentable) which relate to the actual or anticipated business, research and development or existing or future products or services of the Company or of any of its subsidiaries or affiliates, and which are conceived, developed or made by Executive (whether or not during usual business hours and whether or not alone or in conjunction with any other person) while employed by the Company, together with all patent applications, letters patent, trademark, trade name and service mark applications or registrations, copyrights and reissues thereof that may be granted for or upon any of the foregoing (collectively referred to herein as the “Work Product”), belong in all instances to the Company or its subsidiaries or affiliates, as applicable, and Executive hereby assigns to the Company all Work Product and all of his interest therein.  Executive will promptly perform all actions reasonably requested by the Board (whether during or after his employment with the Company) to establish and confirm the ownership of such Work Product (including, without limitation, the execution and delivery of assignments, consents, powers of attorney and other instruments) by the Company or its subsidiaries or affiliates, as applicable, and to provide reasonable assistance to the Company or any of its subsidiaries and affiliates in connection with the prosecution of any applications for patents, trademarks, trade names, service marks or reissues thereof or in the prosecution or defense of interferences relating to any Work Product.

16.0.       Covenant Not to Compete.

Section 16.01. Acknowledgment of Executive. Executive acknowledges that his employment with the Company has special, unique and extraordinary value to the Company; that the Company has a lawful interest in protecting its investment in entrusting its Confidential Information to him; and that the Company would be irreparably damaged if Executive were to provide services to any person or entity in violation of this Employment Agreement because in performing such services Executive would inevitably disclose the Company’s Confidential Information to third parties and that the restrictions, prohibitions and other provision of this Section 16.0 are reasonable, fair and equitable in scope, terms, and duration to protect the legitimate business interests of the Company, and are a material inducement to the Company to enter into this Employment Agreement.

Section 16.02. Non-Competition Covenant. Without the consent in writing of the Board, Executive will not, during the Employment Agreement and, in the event of the termination of Executive’s employment by the Company for Cause or by the Executive without Good Reason, for a period of 12 months after such termination of employment (if by the Company for Cause or by Executive without Good Reason), acting alone or in conjunction with others, directly or indirectly engage (either as owner, investor, partner, stockholder, employer, employee, consultant, advisor or director) in activities on behalf of any entity or entities engaged in waste processing and disposal services for low-level radioactive-wastes, naturally occurring, accelerator produced, and exempt radioactive materials, and hazardous and PCB wastes. It is agreed that the ownership of not more than five percent (5%) of the equity securities of any company having securities listed on an exchange or regularly traded in the over-the-counter market shall not, of itself, be deemed inconsistent with this Section 16.02.

Section 16.03. Non-Solicitation of Vendors and Customers. Without the consent in writing of the Board, after Executive’s employment has terminated for any reason, Executive will not, during the Employment Agreement and for a period of 18 months thereafter if Executive’s employment is terminated by the Company for Cause or by the Executive without Good Reason or due to a Change in Control, acting alone or in conjunction with others, either directly or indirectly induce any vendors or customers of the Company to curtail or cancel their business with the Company or any of its subsidiaries.

Section 16.04. Non-Solicitation of Employees. Without the consent in writing of the Board, after Executive’s employment has terminated for any reason, Executive will not, during the Employment Agreement and for a period of 24 months thereafter, acting alone or in conjunction with others, either directly or indirectly induce, or attempt to influence, any employee of the Company or any of its subsidiaries to terminate his or her employment.

17.0.       Remedies.

Section 17.01. Specific Performance; Costs of Enforcement. Executive acknowledges that the covenants and agreements, which he has made in this Employment Agreement are reasonable and are required for the reasonable protection of the Company and its business.  Executive agrees that the breach of any covenant or agreement contained herein will result in irreparable injury to the Company and that, in addition to all other remedies provided by law or in equity with respect to the breach of any provision of this Employment Agreement, the Company and its successors and assigns will be entitled to enforce the specific performance by Executive of his obligations hereunder and to enjoin him from engaging in any activity in violation hereof and that no claim by Executive against the Company or its successors or assigns will constitute a defense or bar to the specific enforcement of such obligations.  Executive agrees that the Company and any successor or assign shall be entitled to recover all costs of enforcing any provision of this Employment Agreement, including, without limitation, reasonable attorneys’ fees and costs of litigation.  In the event of a breach by Executive of any covenant or agreement contained herein, the running of the restrictive covenant periods (but not of Executive’s obligations hereunder) shall be tolled during the period of the continuance of any actual breach or violation.

Section 17.02. Remedy for Breach of Restrictive Covenants. The provisions of Section 14.0 (Confidentiality), Section 15.0 (Work Product Assignment), and Section 16.0 (Covenant Not to Compete) are separate and distinct commitments independent of each of the other Sections. Accordingly, notwithstanding any other provisions of this Employment Agreement, Executive agrees that damages in the event of a breach or a threatened breach by Executive of Section 14.0 (Confidentiality) and Section 16.0 (Covenant Not to Compete) would be difficult if not impossible to ascertain and an inadequate remedy, and it is therefore agreed that the Company, in addition to and without limiting any other remedy or right it may have, shall have the right to an immediate injunction or other equitable relief enjoining any such threatened or actual breach, without any requirement to post bond or provide similar security.  The existence of this right shall not preclude the Company from pursuing any other rights and remedies at law or in equity that the Company may have, including recovery of damages for any breach of such Sections.

Section 17.03. Right to Cancel Payments.

(a) In addition to the remedies set forth above in Sections 17.01 and 17.02, the Company may, at the sole discretion of the Board, cancel, rescind, suspend, withhold or otherwise limit or restrict the Severance Payment under Section 5.02 (Termination by the Company Without Cause or by the Executive For Good Reason) (which excludes any other payments made to Executive under Section 2.0 and under Sections 5.0 and 6.0 above), whether vested or not, at any time if:

(i) Executive is not in compliance with all of the provisions of Section 14.0 (Confidentiality), Section 15.0 (Work Product Assignment) and Section 16.0 (Covenant Not to Compete); and

(ii) Such non-compliance has been finally determined by binding arbitration pursuant to Section 18.0 (Dispute Resolution).

(b) As a condition to the receipt of any Severance Payment, Executive shall certify to the Company that he is in compliance with the provisions set forth above.

(c) In the event that Executive fails to comply with the provisions set forth in Section 14.0 (Confidentiality), Section 15.0 (Work Product Assignment) and/or Section 16.0 (Covenant Not to Compete), as finally determined by binding arbitration pursuant to Section 18.0 (Dispute Resolution), prior to or within twelve (12) months after any payment by the Company with respect to any Severance Payment under Section 5.02, such payment may be rescinded by the Company within 12 months thereafter.  In the event of such rescission, Executive shall pay to the Company, within 12 months of the Company’s rescission of one or more Severance Payments, the amount of any such payment(s) received as a result of the rescinded payment(s), without interest, in such further manner and on such further terms and conditions as may be required by the Company; and the Company shall be entitled to set-off against the amount of such payment any amount owed to Executive by the Company, other than wages.

(d) Executive acknowledges that the foregoing provisions are fair, equitable and reasonable for the protection of the Company’s interests in a stable workforce and the time and expense the Company has incurred to develop its business and its customer and vendor relationships.

18.0.       Dispute Resolution.

Except as described above in Section 17.02 (Remedy for Breach of Restrictive Covenants):

Section 18.01. Initial Negotiations. Company and Executive agree to resolve all disputes arising out of their employment relationship by the following alternative dispute resolution process: (a) the Company and Executive agree to seek a fair and prompt negotiated resolution; but if this is not possible, (b) all disputes shall be resolved by binding arbitration; provided, however, that during this process, at the request of either Party, made not later than 60 days after the initial arbitration demand, the Parties agree to attempt to resolve any dispute by non-binding, third-party intervention, including either mediation or evaluation or both but without delaying the arbitration hearing date.  BY ENTERING INTO THIS EMPLOYMENT AGREEMENT, BOTH PARTIES GIVE UP THEIR RIGHT TO HAVE THE DISPUTE DECIDED IN COURT BY A JUDGE OR JURY.

Section 18.02. Mandatory Arbitration. Any controversy or claim arising out of or connected with Executive’s employment at the Company, including but not limited to claims for compensation or severance and claims of wrongful termination, age, sex or other discrimination or civil rights shall be decided by arbitration.  In the event the Parties cannot agree on an arbitrator, then the arbitrator shall be selected by the administrator of the American Arbitration Association (“AAA”) office in Salt Lake City, Utah.  The arbitrator shall be an attorney with at least 15 years’ experience in employment law in Idaho.  Boise, Idaho shall be the site of the arbitration. All statutes of limitation, which would otherwise be applicable, shall apply to any arbitration proceeding hereunder.  Any issue about whether a controversy or claim is covered by this Employment Agreement shall be determined by the arbitrator.

Section 18.03. Arbitration Rules.

(a) The arbitration shall be conducted in accordance with this Employment Agreement, using as appropriate the AAA Employment Dispute Resolution Rules in effect on the date hereof.  The arbitrator shall not be bound by the rules of evidence or of civil procedure, but rather may consider such writings and oral presentations as reasonable business people would use in the conduct of their day-to-day affairs, and may require both Parties to submit some or all of their respective cases by written declaration or such other manner of presentation as the arbitrator may determine to be appropriate.  The Parties agree to limit live testimony and cross-examination to the extent necessary to ensure a fair hearing on material issues.

(b) The arbitrator shall take such steps as may be necessary to hold a private hearing within 120 days of the initial request for arbitration and to conclude the hearing within two days; and the arbitrator’s written decision shall be made not later than 14 calendar days after the hearing.  The Parties agree that they have included these time limits in order to expedite the proceeding, but they are not jurisdictional, and the arbitrator may for good cause allow reasonable extensions or delays, which shall not affect the validity of the award.  Both written discovery and depositions shall be allowed.  The extent of such discovery will be determined by the Parties and any disagreements concerning the scope and extent of discovery shall be resolved by the arbitrator.  The written decision shall contain a brief statement of the claim(s) determined and the award made on each claim.  In making the decision and award, the arbitrator shall apply applicable substantive law.  The arbitrator may award injunctive relief or any other remedy available from a judge, including consolidation of this arbitration with any other involving common issues of law or fact which may promote judicial economy, and may award attorneys’ fees and costs to the prevailing Party, but shall not have the power to award punitive or exemplary damages.  The Parties specifically state that the agreement to limit damages was agreed to by the Parties after negotiations.

19.0.       Attorneys’ Fees.

Section 19.01. Prevailing Party Entitled to Attorneys’ Fees. In any action at law or in equity to enforce any of the provisions or rights under this Employment Agreement, the unsuccessful Party to such litigation, as determined by the arbitrator in accordance with the dispute resolution provisions set forth above, shall pay the successful Party or Parties all costs, expenses and reasonable attorneys’ fees incurred therein by such Party or Parties (including, without limitation, such costs, expenses and fees on appeal), excluding, however, any time spent by Company employees, including in-house legal counsel, and if such successful Party or Parties shall recover judgment in any such action or proceeding, such costs, expenses and attorneys’ fees shall be included as part of such judgment.

Section 19.02. Limitation on Fees. Notwithstanding the foregoing provision, in no event shall the successful Party or Parties be entitled to recover an amount from the unsuccessful Party for costs, expenses and attorneys’ fees that exceeds the unsuccessful Party’s or Parties’ costs, expenses and attorneys’ fees in connection with the action or proceeding.

20.0.       Miscellaneous Provisions.

Section 20.01. Prior Employment Agreements. Executive represents and warrants that Executive’s performance of all the terms of this Employment Agreement and as an Executive of the Company does not, and will not, breach any employment agreement, arrangement or understanding or any agreement, arrangement or understanding to keep in confidence proprietary information acquired by Executive in confidence or in trust prior to Executive’s employment by the Company. Executive has not entered into, and shall not enter into, any agreement, arrangement or understanding, either written or oral, which is in conflict with this Employment Agreement or which would be violated by Executive entering into, or carrying out his obligations under, this Employment Agreement.  This Employment Agreement supersedes any former oral agreement and any former written agreement heretofore executed relating generally to the employment of Executive with the Company, including without limitation, the Prior Agreement.

Section 20.02. Assignment; Binding Effect. This Employment Agreement may not be assigned by Executive in whole or in part. Notwithstanding the foregoing, this Employment Agreement shall inure to the benefit of and be enforceable by Executive’s personal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.  If Executive should die while any amounts would still be payable to him hereunder if he had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Employment Agreement to Executive’s estate.

Section 20.03. Headings. Headings used in this Employment Agreement are for convenience only and shall not be used to interpret or construe its provisions.

Section 20.04. Waiver. No provision of this Employment Agreement may be waived or discharged unless such waiver or discharge is agreed to in writing and signed by the Chairman of the Board. No waiver by either Party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Employment Agreement to be performed by such other Party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

Section 20.05. Amendments. No amendments or variations of the terms and conditions of this Employment Agreement shall be valid unless the same is in writing and signed by the Parties hereto.

Section 20.06. Severability. The invalidity or unenforceability of any provision of this Employment Agreement, whether in whole or in part, shall not in any way affect the validity and/or enforceability of any other provision contained herein. Any invalid or unenforceable provision shall be deemed severable to the extent of any such invalidity or unenforceability.  It is expressly understood and agreed that while the Company and Executive consider the restrictions contained in this Employment Agreement reasonable for the purpose of preserving for the Company the good will, other proprietary rights and intangible business value of the Company, if a final judicial determination is made by a court having jurisdiction that the time or territory or any other restriction contained in this Employment Agreement is an unreasonable or otherwise unenforceable restriction against Executive, the provisions of such clause shall not be rendered void but shall be deemed amended to apply as to maximum time and territory and to such other extent as such court may judicially determine or indicate to be reasonable.

Section 20.07. Governing Law. This Employment Agreement shall be construed and enforced pursuant to the laws of the State of Idaho.

Section 20.08. Executive Officer Status. Executive acknowledges that he may be deemed to be an “executive officer” of the Company for purposes of the Securities Act of 1933, as amended (the “1933 Act”), and the Securities Exchange Act of 1934, as amended (the “1934 Act”) and, if so, he shall comply in all respects with all the rules and regulations under the 1933 Act and the 1934 Act applicable to him in a timely and non-delinquent manner.  In order to assist the Company in complying with its obligations under the 1933 Act and 1934 Act, Executive shall provide to the Company such information about Executive as the Company shall reasonably request including, but not limited to, information relating to personal history and stockholdings.  Executive shall report to the Secretary of the Company or other designated officer of the Company all changes in beneficial ownership of any shares of the Company’s Common Stock deemed to be beneficially owned by Executive and/or any members of Executive’s immediate family.  Executive further agrees to comply with all requirements placed on him by the Sarbanes-Oxley Act of 2002, Public Law 107-204.

Section 20.09. Tax Withholding. To the extent required by law, the Company shall deduct or withhold from any payments under this Employment Agreement all applicable Federal, state or local income taxes, Social Security, FICA, FUTA and other amounts that the Company determines in good faith are required by law to be withheld.

Section 20.10. Counterparts. This Employment Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute but one document.

Section 20.11. Exhibits. Any Exhibits attached hereto are incorporated herein by reference and are an integral part of this Employment Agreement and are deemed incorporated herein by reference.

Section 20.12. Retention of Counsel. Executive acknowledges that he has had the opportunity to review this Employment Agreement and the transactions contemplated hereby with his own legal counsel.

[The remainder of this page intentionally left blank]

IN WITNESS WHEREOF, this Executive Employment Agreement has been duly executed by the Company and Executive as of the date first above written.

EXECUTIVE:

JEFFREY R. FEELER

COMPANY:

US ECOLOGY, INC.

By:

Name: STEPHEN A. ROMANO

Title: CHAIRMAN OF THE BOARD OF DIRECTORS

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 nine-month periods ended September 30, 2013, and 2012, as indicated in our report dated October 31, 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 September 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

October 31, 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: October 31, 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: October 31, 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 September 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: October 31, 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

9 Months Ended

Sep. 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 pending 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 September 30, 2013 consisted of the following:

$s in thousands	Payments
2013	$	17
2014	245
2015	301
2016	310
2017	318
Thereafter	382
	$	1,573

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CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
CONSOLIDATED STATEMENTS OF OPERATIONS
Revenue	$ 53,090	$ 45,739	$ 141,766	$ 118,732
Direct operating costs	20,902	19,893	61,745	56,164
Transportation costs	10,568	7,257	24,091	14,577
Gross profit	21,620	18,589	55,930	47,991
Selling, general and administrative expenses	6,108	6,196	18,353	18,167
Operating income	15,512	12,393	37,577	29,824
Other income (expense):
Interest income	4	4	11	13
Interest expense	(208)	(231)	(651)	(659)
Foreign currency gain (loss)	683	1,605	(1,448)	1,775
Other	77	70	268	672
Total other income (expense)	556	1,448	(1,820)	1,801
Income before income taxes	16,068	13,841	35,757	31,625
Income tax expense	5,740	5,179	12,813	12,078
Net income	$ 10,328	$ 8,662	$ 22,944	$ 19,547
Earnings per share:
Basic (in dollars per share)	$ 0.56	$ 0.48	$ 1.25	$ 1.07
Diluted (in dollars per share)	$ 0.56	$ 0.47	$ 1.24	$ 1.07
Shares used in earnings per share calculation:
Basic (in shares)	18,459	18,236	18,395	18,228
Diluted (in shares)	18,533	18,270	18,475	18,262
Dividends paid per share (in dollars per share)	$ 0.18	$ 0.18	$ 0.36	$ 0.54

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RECEIVABLES

9 Months Ended

Sep. 30, 2013

RECEIVABLES

RECEIVABLES

NOTE 4. RECEIVABLES

Receivables consisted of the following:

	September 30,			December 31,
$s in thousands	2013			2012
Trade	$	39,031		$	32,787
Unbilled revenue	1,489			1,529
Other	681			99
Total receivables	41,201			34,415
Allowance for doubtful accounts	(407		)	(468		)
Receivables, net	$	40,794		$	33,947

XML

RECEIVABLES (Tables)

9 Months Ended

Sep. 30, 2013

RECEIVABLES

Schedule of receivables

	September 30,			December 31,
$s in thousands	2013			2012
Trade	$	39,031		$	32,787
Unbilled revenue	1,489			1,529
Other	681			99
Total receivables	41,201			34,415
Allowance for doubtful accounts	(407		)	(468		)
Receivables, net	$	40,794		$	33,947

XML

EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2013

EARNINGS PER SHARE

EARNINGS PER SHARE

NOTE 12. EARNINGS PER SHARE

	Three Months Ended September 30,
$s and shares in thousands, except per share	2013				2012
amounts	Basic		Diluted		Basic		Diluted
Net income	10,328		$	10,328	$	8,662	$	8,662
Weighted average basic shares outstanding	18,459		18,459		18,236		18,236
Dilutive effect of stock options and restricted stock			74				34
Weighted average diluted shares outstanding			18,533				18,270
Earnings per share	$	0.56	$	0.56	$	0.48	$	0.47
Anti-dilutive shares excluded from calculation			174				324

	Nine Months Ended September 30,
$s and shares in thousands, except per share	2013				2012
amounts	Basic		Diluted		Basic		Diluted
Net income	$	22,944	$	22,944	$	19,547	$	19,547
Weighted average basic shares outstanding	18,395		18,395		18,228		18,228
Dilutive effect of stock options and restricted stock			80				34
Weighted average diluted shares outstanding			18,475				18,262
Earnings per share	$	1.25	$	1.24	$	1.07	$	1.07
Anti-dilutive shares excluded from calculation			197				324

XML

DEBT (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2013
DEBT
Maximum borrowing capacity	$ 95.0
Revolving Line of Credit
DEBT
Maximum borrowing capacity	20.0
Effective interest rate (as a percent)	1.43%
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)	1.43%
Amount outstanding	35.5
Availability for additional borrowings under line of credit	$ 31.2

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GOODWILL AND INTANGIBLE ASSETS (Tables)

9 Months Ended

Sep. 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	(746		)
Balance at September 30, 2013	$	22,359

Schedule of intangible assets

$s in thousands	September 30, 2013			December 31, 2012
Amortizing intangible assets:
Developed software	$	340		$	352
Database	97			100
Customer relationships	5,128			5,269
Technology - Formulae and processes	8,831			9,144
Permits, licenses and lease	27,123			28,085
Non-compete agreements	20			20
Total amortizing intangible assets	41,539			42,970
Accumulated amortization	(4,100		)	(3,120		)
Nonamortizing intangible assets:
Permits and licenses	750			750
Tradename	165			171
Total intangible assets, net	$	38,354		$	40,771

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BUSINESS COMBINATION (Tables) (US Ecology Michigan)

9 Months Ended

Sep. 30, 2013

US Ecology Michigan

BUSINESS ACQUISITIONS

Schedule of unaudited pro forma financial information

	(unaudited)
	Nine Months Ended
$s in thousands, except per share amounts	September 30, 2012
Pro forma combined:
Revenue	$	124,233
Net income	$	19,402
Earnings per share
Basic	$	1.06
Diluted	$	1.06

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SUBSEQUENT EVENT (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	9 Months Ended		0 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Oct. 25, 2013 Subsequent event	Oct. 02, 2013 Subsequent event
SUBSEQUENT EVENT
Quarterly dividend declared (in dollars per share)				$ 0.18
Dividend paid in cash	$ 6,645	$ 9,850	$ 3,300

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RECEIVABLES (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
RECEIVABLES
Trade	$ 39,031	$ 32,787
Unbilled revenue	1,489	1,529
Other	681	99
Total receivables	41,201	34,415
Allowance for doubtful accounts	(407)	(468)
Receivables, net	$ 40,794	$ 33,947

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INCOME TAXES (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
INCOME TAXES
Effective tax rate (as a percent)	35.70%	37.40%	35.80%	38.20%

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OPERATING SEGMENTS (Tables)

9 Months Ended

Sep. 30, 2013

OPERATING SEGMENTS

Summary of financial information concerning reportable segments

Three Months Ended September 30, 2013 (in thousands)	Operating Disposal Facilities			Non- Operating Disposal Facilities			Corporate			Total
Revenue - Treatment and disposal	$	42,489		$	6		$	—		$	42,495
Revenue - Transportation services	10,595			—			—			10,595
Total revenue	53,084			6			—			53,090
Direct operating costs	20,847			55			—			20,902
Transportation costs	10,568			—			—			10,568
Gross profit (loss)	21,669			(49		)	—			21,620
Selling, general & administrative expense	2,611			—			3,497			6,108
Operating income (loss)	19,058			(49		)	(3,497		)	15,512
Interest income (expense), net	4			—			(208		)	(204		)
Foreign currency gain (loss)	(233		)	—			916			683
Other income	75			2			—			77
Income (loss) before income taxes	18,904			(47		)	(2,789		)	16,068
Income tax expense	—			—			5,740			5,740
Net income (loss)	$	18,904		$	(47	)	$	(8,529	)	$	10,328
Depreciation, amortization & accretion	$	4,336		$	52		$	9		$	4,397
Capital expenditures	$	2,915		$	—		$	145		$	3,060
Total assets	$	222,503		$	87		$	8,141		$	230,731

Three Months Ended September 30, 2012 (in thousands)	Operating Disposal Facilities			Non- Operating Disposal Facilities			Corporate			Total
Revenue - Treatment and disposal	$	38,578		$	5		$	—		$	38,583
Revenue - Transportation services	7,156			—			—			7,156
Total revenue	45,734			5			—			45,739
Direct operating costs	19,838			55			—			19,893
Transportation costs	7,257			—			—			7,257
Gross profit (loss)	18,639			(50		)	—			18,589
Selling, general & administrative expense	2,868			—			3,328			6,196
Operating income (loss)	15,771			(50		)	(3,328		)	12,393
Interest income (expense), net	4			—			(231		)	(227		)
Foreign currency gain (loss)	(165		)	—			1,770			1,605
Other income	68			2			—			70
Income (loss) before income taxes	15,678			(48		)	(1,789		)	13,841
Income tax expense	—			—			5,179			5,179
Net income (loss)	$	15,678		$	(48	)	$	(6,968	)	$	8,662
Depreciation, amortization & accretion	$	4,083		$	54		$	11		$	4,148
Capital expenditures	$	6,690		$	—		$	—		$	6,690
Total assets	$	215,786		$	97		$	7,847		$	223,730

Nine Months Ended September 30, 2013 (in thousands)	Operating Disposal Facilities		Non- Operating Disposal Facilities			Corporate			Total
Revenue - Treatment and disposal	$	117,553	$	16		$	—		$	117,569
Revenue - Transportation services	24,197		—			—			24,197
Total revenue	141,750		16			—			141,766
Direct operating costs	61,583		162			—			61,745
Transportation costs	24,091		—			—			24,091
Gross profit (loss)	56,076		(146		)	—			55,930
Selling, general & administrative expense	8,524		—			9,829			18,353
Operating income (loss)	47,552		(146		)	(9,829		)	37,577
Interest income (expense), net	10		—			(650		)	(640		)
Foreign currency gain (loss)	199		—			(1,647		)	(1,448		)
Other income	261		7			—			268
Income (loss) before income taxes	48,022		(139		)	(12,126		)	35,757
Income tax expense	—		—			12,813			12,813
Net income (loss)	$	48,022	$	(139	)	$	(24,939	)	$	22,944
Depreciation, amortization & accretion	$	12,628	$	156		$	27		$	12,811
Capital expenditures	$	15,330	$	—		$	260		$	15,590
Total assets	$	222,503	$	87		$	8,141		$	230,731

Nine Months Ended September 30, 2012 (in thousands)	Operating Disposal Facilities			Non- Operating Disposal Facilities			Corporate			Total
Revenue - Treatment and disposal	$	104,486		$	16		$	—		$	104,502
Revenue - Transportation services	14,230			—			—			14,230
Total revenue	118,716			16			—			118,732
Direct operating costs	55,997			167			—			56,164
Transportation costs	14,576			1			—			14,577
Gross profit (loss)	48,143			(152		)	—			47,991
Selling, general & administrative expense	8,310			—			9,857			18,167
Operating income (loss)	39,833			(152		)	(9,857		)	29,824
Interest income (expense), net	13			—			(659		)	(646		)
Foreign currency gain (loss)	(247		)	—			2,022			1,775
Other income	669			3			—			672
Income (loss) before income taxes	40,268			(149		)	(8,494		)	31,625
Income tax expense	—			—			12,078			12,078
Net income (loss)	$	40,268		$	(149	)	$	(20,572	)	$	19,547
Depreciation, amortization & accretion	$	12,142		$	162		$	32		$	12,336
Capital expenditures	$	12,400		$	17		$	16		$	12,433
Total assets	$	215,786		$	97		$	7,847		$	223,730

Summary of revenues by geographic location

	Three Months Ended September 30,				Nine Months Ended September 30,
$s in thousands	2013		2012		2013		2012
United States	$	37,833	$	36,100	$	101,852	$	91,658
Canada	15,257		9,639		39,914		27,074
Total revenue	$	53,090	$	45,739	$	141,766	$	118,732

Schedule of long-lived assets by geographic location

	September 30,		December 31,
$s in thousands	2013		2012
United States	$	86,851	$	81,605
Canada	66,787		68,958
Total long-lived assets	$	153,638	$	150,563

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EQUITY (Details) (USD $)	9 Months Ended
	Sep. 30, 2013
EQUITY
Number of options exercised (in shares)	242,970
Weighted-average exercise price of options exercised (in dollars per share)	$ 18.93
Number of options exercised via share settlement	127,652
Issuance of restricted stock from treasury stock (in shares)	51,800
Average cost (in dollars per share)	$ 16.68

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PROPERTY AND EQUIPMENT (Tables)

9 Months Ended

Sep. 30, 2013

PROPERTY AND EQUIPMENT

Schedule of property and equipment

	September 30,			December 31,
$s in thousands	2013			2012
Cell development costs	$	65,708		$	64,994
Land and improvements	18,166			14,920
Buildings and improvements	56,605			55,177
Railcars	17,375			17,375
Vehicles and other equipment	42,985			39,689
Construction in progress	18,891			12,454
Total property and equipment	219,730			204,609
Accumulated depreciation and amortization	(104,446		)	(94,817		)
Property and equipment, net	$	115,284		$	109,792

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Cash flows from operating activities:
Net income	$ 22,944,000	$ 19,547,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property and equipment	10,792,000	10,222,000
Amortization of intangible assets	1,092,000	1,096,000
Accretion of closure and post-closure obligations	927,000	1,018,000
Unrealized foreign currency (gain) loss	1,706,000	(2,034,000)
Deferred income taxes	(1,646,000)	(785,000)
Share-based compensation expense	601,000	564,000
Unrecognized tax benefits	10,000	10,000
Net (gain) loss on sale of property and equipment	12,000	(34,000)
Changes in assets and liabilities:
Receivables	(7,218,000)	(1,994,000)
Income tax receivable		187,000
Other assets	(833,000)	(213,000)
Accounts payable and accrued liabilities	1,004,000	(3,485,000)
Deferred revenue	2,564,000	(112,000)
Accrued salaries and benefits	(1,541,000)	875,000
Income tax payable	2,752,000	515,000
Closure and post-closure obligations	(989,000)	(544,000)
Net cash provided by operating activities	32,177,000	24,833,000
Cash flows from investing activities:
Purchases of property and equipment	(15,590,000)	(12,433,000)
Business acquisition, net of cash acquired		(10,743,000)
Proceeds from sale of property and equipment	64,000	465,000
Restricted cash		5,000
Net cash used in investing activities	(15,526,000)	(22,706,000)
Cash flows from financing activities:
Payments on reducing revolving line of credit	(19,000,000)	(17,000,000)
Proceeds from reducing revolving line of credit	9,500,000	26,000,000
Proceeds from exercise of stock options	2,192,000
Deferred financing costs paid	(185,000)
Dividends paid	(6,645,000)	(9,850,000)
Other	(58,000)	(259,000)
Net cash used in financing activities	(14,196,000)	(1,109,000)
Effect of foreign exchange rate changes on cash	(197,000)	217,000
Increase in cash and cash equivalents	2,258,000	1,235,000
Cash and cash equivalents at beginning of period	2,120,000	4,289,000
Cash and cash equivalents at end of period	4,378,000	5,524,000
Supplemental Disclosures
Income taxes paid, net of receipts	11,467,000	12,155,000
Interest paid	547,000	616,000
Non-cash investing and financing activities:
Closure and post-closure retirement asset	550,000	956,000
Capital expenditures in accounts payable	2,526,000	973,000
Restricted stock issued from treasury shares	$ 864,000	$ 372,000

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

9 Months Ended

Sep. 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 September 30,					Nine Months Ended September 30,
$s in thousands	2013			2012		2013			2012
Balance, beginning of period	$	(1,301	)	$	18	$	628		$	(117	)
Foreign currency translation gain (loss) in other comprehensive income	782			944		(1,147		)	1,079
Balance, end of period	$	(519	)	$	962	$	(519	)	$	962

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PROPERTY AND EQUIPMENT

9 Months Ended

Sep. 30, 2013

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT

NOTE 5. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

	September 30,			December 31,
$s in thousands	2013			2012
Cell development costs	$	65,708		$	64,994
Land and improvements	18,166			14,920
Buildings and improvements	56,605			55,177
Railcars	17,375			17,375
Vehicles and other equipment	42,985			39,689
Construction in progress	18,891			12,454
Total property and equipment	219,730			204,609
Accumulated depreciation and amortization	(104,446		)	(94,817		)
Property and equipment, net	$	115,284		$	109,792

Depreciation and amortization expense for each of the three months ended September 30, 2013 and 2012 was $3.7 million and $3.4 million, respectively. Depreciation and amortization expense for the nine months ended September 30, 2013 and 2012 was $10.8 million and $10.2 million, respectively.

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CONCENTRATIONS AND CREDIT RISK

9 Months Ended

Sep. 30, 2013

CONCENTRATIONS AND CREDIT RISK

CONCENTRATIONS AND CREDIT RISK

NOTE 3. CONCENTRATIONS AND CREDIT RISK

Major Customers

Revenue from a single customer accounted for 14% of total revenue for the three months ended September 30, 2013. No other customer accounted for more than 10% of total revenue for the three months ended September 30, 2013 or 2012. No customer accounted for more than 10% of total revenue for the nine months ended September 30, 2013 or 2012.

Receivables from a single customer accounted for approximately 18% of total trade receivables as of September 30, 2013.  No other customer accounted for more than 10% of total trade receivables as of September 30, 2013. No customer accounted for more than 10% of total trade receivables as of 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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COMMITMENTS AND CONTINGENCIES (Details) (USD $)		3 Months Ended
	Sep. 30, 2013	Jun. 30, 2013 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
Future minimum lease payments on non-cancelable operating lease
2013	17,000
2014	245,000
2015	301,000
2016	310,000
2017	318,000
Thereafter	382,000
Total	$ 1,573,000

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CLOSURE AND POST-CLOSURE OBLIGATIONS (Tables)

9 Months Ended

Sep. 30, 2013

CLOSURE AND POST-CLOSURE OBLIGATIONS

Schedule of changes in closure and post-closure obligations

	Three Months Ended			Nine Months Ended
$s in thousands	September 30, 2013			September 30, 2013
Closure and post-closure obligations, beginning of period	$	17,252		$	17,362
Accretion expense	314			927
Payments	(369		)	(1,539		)
Adjustments	—			550
Currency translation	(17		)	(120		)
Closure and post-closure obligations, end of period	17,180			17,180
Less current portion	(894		)	(894		)
Long-term portion	$	16,286		$	16,286

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Changes in accumulated other comprehensive income (loss)
Balance at the beginning of the period	$ (1,301)	$ 18	$ 628	$ (117)
Foreign currency translation gain (loss) in other comprehensive income	782	944	(1,147)	1,079
Balance at the end of the period	$ (519)	$ 962	$ (519)	$ 962

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GOODWILL AND INTANGIBLE ASSETS (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Changes in goodwill
Balance at the beginning of the period			$ 23,105,000
Foreign currency translation			(746,000)
Balance at the end of the period	22,359,000		22,359,000
Intangible assets
Total amortizing intangible assets	41,539,000		41,539,000		42,970,000
Accumulated amortization	(4,100,000)		(4,100,000)		(3,120,000)
Total intangible assets, net	38,354,000		38,354,000		40,771,000
Amortization expense	362,000	372,000	1,092,000	1,096,000
Permits and licenses
Intangible assets
Nonamortizing intangible assets	750,000		750,000		750,000
Tradename
Intangible assets
Nonamortizing intangible assets	165,000		165,000		171,000
Developed software
Intangible assets
Total amortizing intangible assets	340,000		340,000		352,000
Database
Intangible assets
Total amortizing intangible assets	97,000		97,000		100,000
Customer relationships
Intangible assets
Total amortizing intangible assets	5,128,000		5,128,000		5,269,000
Technology - Formulae and processes
Intangible assets
Total amortizing intangible assets	8,831,000		8,831,000		9,144,000
Permits, licenses and lease
Intangible assets
Total amortizing intangible assets	27,123,000		27,123,000		28,085,000
Non-compete agreements
Intangible assets
Total amortizing intangible assets	$ 20,000		$ 20,000		$ 20,000

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OPERATING SEGMENTS (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Revenue, Property and Equipment and Intangible Assets Outside of the United States
Total revenue	$ 53,090	$ 45,739	$ 141,766	$ 118,732
Total long- lived assets	153,638		153,638		150,563
United States
Revenue, Property and Equipment and Intangible Assets Outside of the United States
Total revenue	37,833	36,100	101,852	91,658
Total long- lived assets	86,851		86,851		81,605
Canada
Revenue, Property and Equipment and Intangible Assets Outside of the United States
Total revenue	15,257	9,639	39,914	27,074
Total long- lived assets	$ 66,787		$ 66,787		$ 68,958

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	Sep. 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	18,534	18,385
Treasury stock, shares	19	71

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DEBT

9 Months Ended

Sep. 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 September 30, 2013, the effective interest rate on the Revolving Line of Credit was 1.43%. Interest only payments are due either monthly or on the last day of any interest period, as applicable. At September 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 September 30, 2013, the effective interest rate of the Reducing Revolving Line of Credit was 1.43%.  Interest only payments are due either monthly or on the last day of any interest period, as applicable.  At September 30, 2013, $35.5 million was outstanding on the Reducing Revolving Line of Credit with $31.2 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 September 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		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income	$ 10,328	$ 8,662	$ 22,944	$ 19,547
Other comprehensive income (loss):
Foreign currency translation gain (loss)	782	944	(1,147)	1,079
Comprehensive income	$ 11,110	$ 9,606	$ 21,797	$ 20,626

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CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Current Assets:
Cash and cash equivalents	$ 4,378	$ 2,120
Receivables, net	40,794	33,947
Prepaid expenses and other current assets	4,076	3,161
Deferred income taxes	888	1,276
Total current assets	50,136	40,504
Property and equipment, net	115,284	109,792
Restricted cash	4,111	4,111
Intangible assets, net	38,354	40,771
Goodwill	22,359	23,105
Other assets	487	411
Total assets	230,731	218,694
Current Liabilities:
Accounts payable	8,070	6,333
Deferred revenue	6,439	3,919
Accrued liabilities	8,291	7,322
Accrued salaries and benefits	5,925	7,570
Income taxes payable	3,168	426
Current portion of closure and post-closure obligations	894	1,913
Total current liabilities	32,787	27,483
Long-term closure and post-closure obligations	16,286	15,449
Reducing revolving line of credit	35,500	45,000
Other long-term liabilities	80	114
Unrecognized tax benefits	477	467
Deferred income taxes	15,693	18,159
Total liabilities	100,823	106,672
Commitments and contingencies
Stockholders' Equity:
Common stock $0.01 par value, 50,000 authorized; 18,534 and 18,385 shares issued, respectively	185	184
Additional paid-in capital	65,838	63,969
Retained earnings	64,723	48,424
Treasury stock, at cost, 19 and 71 shares, respectively	(319)	(1,183)
Accumulated other comprehensive income (loss)	(519)	628
Total stockholders' equity	129,908	112,022
Total liabilities and stockholders' equity	$ 230,731	$ 218,694

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COMMITMENTS AND CONTINGENCIES (Tables)

9 Months Ended

Sep. 30, 2013

COMMITMENTS AND CONTINGENCIES

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

$s in thousands	Payments
2013	$	17
2014	245
2015	301
2016	310
2017	318
Thereafter	382
	$	1,573

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables)

9 Months Ended

Sep. 30, 2013

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Schedule of changes in accumulated other comprehensive income (loss)

	Three Months Ended September 30,					Nine Months Ended September 30,
$s in thousands	2013			2012		2013			2012
Balance, beginning of period	$	(1,301	)	$	18	$	628		$	(117	)
Foreign currency translation gain (loss) in other comprehensive income	782			944		(1,147		)	1,079
Balance, end of period	$	(519	)	$	962	$	(519	)	$	962

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OPERATING SEGMENTS (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013 segment	Sep. 30, 2012	Dec. 31, 2012
OPERATING SEGMENTS
Number of reportable segments			2
OPERATING SEGMENTS
Revenue	$ 53,090,000	$ 45,739,000	$ 141,766,000	$ 118,732,000
Direct operating costs	20,902,000	19,893,000	61,745,000	56,164,000
Transportation costs	10,568,000	7,257,000	24,091,000	14,577,000
Gross profit	21,620,000	18,589,000	55,930,000	47,991,000
Selling, general & administrative expense	6,108,000	6,196,000	18,353,000	18,167,000
Operating income	15,512,000	12,393,000	37,577,000	29,824,000
Interest income (expense), net	(204,000)	(227,000)	(640,000)	(646,000)
Foreign currency gain (loss)	683,000	1,605,000	(1,448,000)	1,775,000
Other income	77,000	70,000	268,000	672,000
Income before income taxes	16,068,000	13,841,000	35,757,000	31,625,000
Income tax expense	5,740,000	5,179,000	12,813,000	12,078,000
Net income	10,328,000	8,662,000	22,944,000	19,547,000
Depreciation, amortization & accretion	4,397,000	4,148,000	12,811,000	12,336,000
Capital expenditures	3,060,000	6,690,000	15,590,000	12,433,000
Total assets	230,731,000	223,730,000	230,731,000	223,730,000	218,694,000
Treatment and disposal
OPERATING SEGMENTS
Revenue	42,495,000	38,583,000	117,569,000	104,502,000
Transportation services
OPERATING SEGMENTS
Revenue	10,595,000	7,156,000	24,197,000	14,230,000
Operating Disposal Facilities
OPERATING SEGMENTS
Revenue	53,084,000	45,734,000	141,750,000	118,716,000
Direct operating costs	20,847,000	19,838,000	61,583,000	55,997,000
Transportation costs	10,568,000	7,257,000	24,091,000	14,576,000
Gross profit	21,669,000	18,639,000	56,076,000	48,143,000
Selling, general & administrative expense	2,611,000	2,868,000	8,524,000	8,310,000
Operating income	19,058,000	15,771,000	47,552,000	39,833,000
Interest income (expense), net	4,000	4,000	10,000	13,000
Foreign currency gain (loss)	(233,000)	(165,000)	199,000	(247,000)
Other income	75,000	68,000	261,000	669,000
Income before income taxes	18,904,000	15,678,000	48,022,000	40,268,000
Net income	18,904,000	15,678,000	48,022,000	40,268,000
Depreciation, amortization & accretion	4,336,000	4,083,000	12,628,000	12,142,000
Capital expenditures	2,915,000	6,690,000	15,330,000	12,400,000
Total assets	222,503,000	215,786,000	222,503,000	215,786,000
Operating Disposal Facilities | Treatment and disposal
OPERATING SEGMENTS
Revenue	42,489,000	38,578,000	117,553,000	104,486,000
Operating Disposal Facilities | Transportation services
OPERATING SEGMENTS
Revenue	10,595,000	7,156,000	24,197,000	14,230,000
Non-Operating Disposal Facilities
OPERATING SEGMENTS
Revenue	6,000	5,000	16,000	16,000
Direct operating costs	55,000	55,000	162,000	167,000
Transportation costs				1,000
Gross profit	(49,000)	(50,000)	(146,000)	(152,000)
Operating income	(49,000)	(50,000)	(146,000)	(152,000)
Other income	2,000	2,000	7,000	3,000
Income before income taxes	(47,000)	(48,000)	(139,000)	(149,000)
Net income	(47,000)	(48,000)	(139,000)	(149,000)
Depreciation, amortization & accretion	52,000	54,000	156,000	162,000
Capital expenditures				17,000
Total assets	87,000	97,000	87,000	97,000
Non-Operating Disposal Facilities | Treatment and disposal
OPERATING SEGMENTS
Revenue	6,000	5,000	16,000	16,000
Corporate
OPERATING SEGMENTS
Selling, general & administrative expense	3,497,000	3,328,000	9,829,000	9,857,000
Operating income	(3,497,000)	(3,328,000)	(9,829,000)	(9,857,000)
Interest income (expense), net	(208,000)	(231,000)	(650,000)	(659,000)
Foreign currency gain (loss)	916,000	1,770,000	(1,647,000)	2,022,000
Income before income taxes	(2,789,000)	(1,789,000)	(12,126,000)	(8,494,000)
Income tax expense	5,740,000	5,179,000	12,813,000	12,078,000
Net income	(8,529,000)	(6,968,000)	(24,939,000)	(20,572,000)
Depreciation, amortization & accretion	9,000	11,000	27,000	32,000
Capital expenditures	145,000		260,000	16,000
Total assets	$ 8,141,000	$ 7,847,000	$ 8,141,000	$ 7,847,000

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CLOSURE AND POST-CLOSURE OBLIGATIONS (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Changes to reported closure and post-closure obligations
Closure and post-closure obligations, beginning of period	$ 17,252	$ 17,362
Accretion expense	314	927	1,018
Payments	(369)	(1,539)
Adjustments		550
Currency translation	(17)	(120)
Closure and post-closure obligations, end of period	17,180	17,180
Less current portion	(894)	(894)		(1,913)
Long-term portion	$ 16,286	$ 16,286		$ 15,449

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PROPERTY AND EQUIPMENT (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
PROPERTY AND EQUIPMENT
Total property and equipment	$ 219,730		$ 219,730		$ 204,609
Accumulated depreciation and amortization	(104,446)		(104,446)		(94,817)
Property and equipment, net	115,284		115,284		109,792
Depreciation and amortization expense	3,700	3,400	10,792	10,222
Cell development costs
PROPERTY AND EQUIPMENT
Total property and equipment	65,708		65,708		64,994
Land and improvements
PROPERTY AND EQUIPMENT
Total property and equipment	18,166		18,166		14,920
Buildings and improvements
PROPERTY AND EQUIPMENT
Total property and equipment	56,605		56,605		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	42,985		42,985		39,689
Construction in progress
PROPERTY AND EQUIPMENT
Total property and equipment	$ 18,891		$ 18,891		$ 12,454

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BUSINESS COMBINATION (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013 US Ecology Michigan	Sep. 30, 2012 US Ecology Michigan	May 31, 2012 US Ecology Michigan
BUSINESS ACQUISITIONS
Percentage of outstanding shares acquired							100.00%
Pro forma combined:
Revenue						$ 124,233,000
Net income						19,402,000
Earnings per share - Basic (in dollars per share)						$ 1.06
Earnings per share - Diluted (in dollars per share)						$ 1.06
Additional information
Revenue	53,090,000	45,739,000	141,766,000	118,732,000	9,400,000
Operating income	$ 15,512,000	$ 12,393,000	$ 37,577,000	$ 29,824,000	$ 255,000

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GOODWILL AND INTANGIBLE ASSETS

9 Months Ended

Sep. 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 nine months ended September 30, 2013 consisted of the following:

$s in thousands	Goodwill
Balance at December 31, 2012	$	23,105
Foreign currency translation	(746		)
Balance at September 30, 2013	$	22,359

Intangible assets consisted of the following:

$s in thousands	September 30, 2013			December 31, 2012
Amortizing intangible assets:
Developed software	$	340		$	352
Database	97			100
Customer relationships	5,128			5,269
Technology - Formulae and processes	8,831			9,144
Permits, licenses and lease	27,123			28,085
Non-compete agreements	20			20
Total amortizing intangible assets	41,539			42,970
Accumulated amortization	(4,100		)	(3,120		)
Nonamortizing intangible assets:
Permits and licenses	750			750
Tradename	165			171
Total intangible assets, net	$	38,354		$	40,771

Amortization expense for the three months ended September 30, 2013 and 2012 was $362,000 and $372,000, respectively. Amortization expense for each of the nine month periods ended September 30, 2013 and 2012 was $1.1 million.

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EARNINGS PER SHARE (Tables)

9 Months Ended

Sep. 30, 2013

EARNINGS PER SHARE

Schedule of earnings per share

	Three Months Ended September 30,
$s and shares in thousands, except per share	2013				2012
amounts	Basic		Diluted		Basic		Diluted
Net income	10,328		$	10,328	$	8,662	$	8,662
Weighted average basic shares outstanding	18,459		18,459		18,236		18,236
Dilutive effect of stock options and restricted stock			74				34
Weighted average diluted shares outstanding			18,533				18,270
Earnings per share	$	0.56	$	0.56	$	0.48	$	0.47
Anti-dilutive shares excluded from calculation			174				324

	Nine Months Ended September 30,
$s and shares in thousands, except per share	2013				2012
amounts	Basic		Diluted		Basic		Diluted
Net income	$	22,944	$	22,944	$	19,547	$	19,547
Weighted average basic shares outstanding	18,395		18,395		18,228		18,228
Dilutive effect of stock options and restricted stock			80				34
Weighted average diluted shares outstanding			18,475				18,262
Earnings per share	$	1.25	$	1.24	$	1.07	$	1.07
Anti-dilutive shares excluded from calculation			197				324

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EARNINGS PER SHARE (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Basic
Net income	$ 10,328	$ 8,662	$ 22,944	$ 19,547
Weighted average basic shares outstanding	18,459	18,236	18,395	18,228
Earnings per share (in dollars per share)	$ 0.56	$ 0.48	$ 1.25	$ 1.07
Diluted
Net income	$ 10,328	$ 8,662	$ 22,944	$ 19,547
Weighted average basic shares outstanding	18,459	18,236	18,395	18,228
Dilutive effect of stock options and restricted stock (in shares)	74	34	80	34
Weighted average diluted shares outstanding	18,533	18,270	18,475	18,262
Earnings per share (in dollars per share)	$ 0.56	$ 0.47	$ 1.24	$ 1.07
Anti-dilutive shares excluded from calculation	174	324	197	324

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INCOME TAXES

9 Months Ended

Sep. 30, 2013

INCOME TAXES

INCOME TAXES

NOTE 10. INCOME TAXES

During the nine months ended September 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 September 30, 2013 was 35.7%, down from 37.4% for the three months ended September 30, 2012. Our effective tax rate for the nine months ended September 30, 2013 was 35.8%, down from 38.2% for the nine months ended September 30, 2012. The decrease for both the three and nine months ended September 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 2010 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

9 Months Ended

Sep. 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)
	Nine Months Ended
$s in thousands, except per share amounts	September 30, 2012
Pro forma combined:
Revenue	$	124,233
Net income	$	19,402
Earnings per share
Basic	$	1.06
Diluted	$	1.06

The amounts of revenue and operating income from US Ecology Michigan included in US Ecology’s consolidated statements of operations for the nine months ended September 30, 2013 were $9.4 million and $255,000, respectively.

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GENERAL

9 Months Ended

Sep. 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 nine months ended September 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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CONCENTRATIONS AND CREDIT RISK (Details) (Major Customers)	3 Months Ended	0 Months Ended
	Sep. 30, 2013 Total revenue	Sep. 30, 2013 Total trade receivables
CONCENTRATIONS AND CREDIT RISK
Concentration of risk (as a percent)	14.00%	18.00%

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EQUITY

9 Months Ended

Sep. 30, 2013

EQUITY

EQUITY

NOTE 13. EQUITY

During the nine months ended September 30, 2013, option holders exercised 242,970 options with a weighted-average exercise price of $18.93 per option. Option holders exercised 127,652 of these options via net share settlement. During the nine months ended September 30, 2013, the Company issued 51,800 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

9 Months Ended

Sep. 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			Nine Months Ended
$s in thousands	September 30, 2013			September 30, 2013
Closure and post-closure obligations, beginning of period	$	17,252		$	17,362
Accretion expense	314			927
Payments	(369		)	(1,539		)
Adjustments	—			550
Currency translation	(17		)	(120		)
Closure and post-closure obligations, end of period	17,180			17,180
Less current portion	(894		)	(894		)
Long-term portion	$	16,286		$	16,286

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GENERAL (Policies)

9 Months Ended

Sep. 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 nine months ended September 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

9 Months Ended

Sep. 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 September 30, 2013 (in thousands)	Operating Disposal Facilities			Non- Operating Disposal Facilities			Corporate			Total
Revenue - Treatment and disposal	$	42,489		$	6		$	—		$	42,495
Revenue - Transportation services	10,595			—			—			10,595
Total revenue	53,084			6			—			53,090
Direct operating costs	20,847			55			—			20,902
Transportation costs	10,568			—			—			10,568
Gross profit (loss)	21,669			(49		)	—			21,620
Selling, general & administrative expense	2,611			—			3,497			6,108
Operating income (loss)	19,058			(49		)	(3,497		)	15,512
Interest income (expense), net	4			—			(208		)	(204		)
Foreign currency gain (loss)	(233		)	—			916			683
Other income	75			2			—			77
Income (loss) before income taxes	18,904			(47		)	(2,789		)	16,068
Income tax expense	—			—			5,740			5,740
Net income (loss)	$	18,904		$	(47	)	$	(8,529	)	$	10,328
Depreciation, amortization & accretion	$	4,336		$	52		$	9		$	4,397
Capital expenditures	$	2,915		$	—		$	145		$	3,060
Total assets	$	222,503		$	87		$	8,141		$	230,731

Three Months Ended September 30, 2012 (in thousands)	Operating Disposal Facilities			Non- Operating Disposal Facilities			Corporate			Total
Revenue - Treatment and disposal	$	38,578		$	5		$	—		$	38,583
Revenue - Transportation services	7,156			—			—			7,156
Total revenue	45,734			5			—			45,739
Direct operating costs	19,838			55			—			19,893
Transportation costs	7,257			—			—			7,257
Gross profit (loss)	18,639			(50		)	—			18,589
Selling, general & administrative expense	2,868			—			3,328			6,196
Operating income (loss)	15,771			(50		)	(3,328		)	12,393
Interest income (expense), net	4			—			(231		)	(227		)
Foreign currency gain (loss)	(165		)	—			1,770			1,605
Other income	68			2			—			70
Income (loss) before income taxes	15,678			(48		)	(1,789		)	13,841
Income tax expense	—			—			5,179			5,179
Net income (loss)	$	15,678		$	(48	)	$	(6,968	)	$	8,662
Depreciation, amortization & accretion	$	4,083		$	54		$	11		$	4,148
Capital expenditures	$	6,690		$	—		$	—		$	6,690
Total assets	$	215,786		$	97		$	7,847		$	223,730

Nine Months Ended September 30, 2013 (in thousands)	Operating Disposal Facilities		Non- Operating Disposal Facilities			Corporate			Total
Revenue - Treatment and disposal	$	117,553	$	16		$	—		$	117,569
Revenue - Transportation services	24,197		—			—			24,197
Total revenue	141,750		16			—			141,766
Direct operating costs	61,583		162			—			61,745
Transportation costs	24,091		—			—			24,091
Gross profit (loss)	56,076		(146		)	—			55,930
Selling, general & administrative expense	8,524		—			9,829			18,353
Operating income (loss)	47,552		(146		)	(9,829		)	37,577
Interest income (expense), net	10		—			(650		)	(640		)
Foreign currency gain (loss)	199		—			(1,647		)	(1,448		)
Other income	261		7			—			268
Income (loss) before income taxes	48,022		(139		)	(12,126		)	35,757
Income tax expense	—		—			12,813			12,813
Net income (loss)	$	48,022	$	(139	)	$	(24,939	)	$	22,944
Depreciation, amortization & accretion	$	12,628	$	156		$	27		$	12,811
Capital expenditures	$	15,330	$	—		$	260		$	15,590
Total assets	$	222,503	$	87		$	8,141		$	230,731

Nine Months Ended September 30, 2012 (in thousands)	Operating Disposal Facilities			Non- Operating Disposal Facilities			Corporate			Total
Revenue - Treatment and disposal	$	104,486		$	16		$	—		$	104,502
Revenue - Transportation services	14,230			—			—			14,230
Total revenue	118,716			16			—			118,732
Direct operating costs	55,997			167			—			56,164
Transportation costs	14,576			1			—			14,577
Gross profit (loss)	48,143			(152		)	—			47,991
Selling, general & administrative expense	8,310			—			9,857			18,167
Operating income (loss)	39,833			(152		)	(9,857		)	29,824
Interest income (expense), net	13			—			(659		)	(646		)
Foreign currency gain (loss)	(247		)	—			2,022			1,775
Other income	669			3			—			672
Income (loss) before income taxes	40,268			(149		)	(8,494		)	31,625
Income tax expense	—			—			12,078			12,078
Net income (loss)	$	40,268		$	(149	)	$	(20,572	)	$	19,547
Depreciation, amortization & accretion	$	12,142		$	162		$	32		$	12,336
Capital expenditures	$	12,400		$	17		$	16		$	12,433
Total assets	$	215,786		$	97		$	7,847		$	223,730

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 September 30,				Nine Months Ended September 30,
$s in thousands	2013		2012		2013		2012
United States	$	37,833	$	36,100	$	101,852	$	91,658
Canada	15,257		9,639		39,914		27,074
Total revenue	$	53,090	$	45,739	$	141,766	$	118,732

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

	September 30,		December 31,
$s in thousands	2013		2012
United States	$	86,851	$	81,605
Canada	66,787		68,958
Total long-lived assets	$	153,638	$	150,563

XML

Document and Entity Information	9 Months Ended
	Sep. 30, 2013	Oct. 25, 2013
Document and Entity Information
Entity Registrant Name	US ECOLOGY, INC.
Entity Central Index Key	0000742126
Document Type	10-Q
Document Period End Date	Sep. 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		18,534,510
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3

XML

SUBSEQUENT EVENT

9 Months Ended

Sep. 30, 2013

SUBSEQUENT EVENT

SUBSEQUENT EVENT

NOTE 15. SUBSEQUENT EVENT

On October 1, 2013, we declared a quarterly dividend of $0.18 per common share to stockholders of record on October 18, 2013. The dividend was paid using cash on hand on October 25, 2013 in an aggregate amount of $3.3 million.