
<PAGE>   1





                       SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549


                                   FORM 10-Q


(Mark One)

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

       For the quarterly period ended       May 31, 1997         or
                                       -------------------------

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

       For the transition period from                   to
                                      -----------------    ------------------ 

       Commission file number 1-11016




                                 ALLWASTE, INC.
             (Exact Name of Registrant as Specified in its Charter)

                                                                        
             DELAWARE                                   74-2427167      
                                                          --------      
  (State or Other Jurisdiction of                    (I.R.S. Employer   
  Incorporation or Organization)                  Identification Number)
                                                                        
                                                                        
   5151 SAN FELIPE, SUITE 1600                                          
          HOUSTON, TEXAS                                77056-3609      
(Address of Principal Executive Offices)                (Zip Code)      
                                                                        

                                 (713) 623-8777
              (Registrant's Telephone Number, Including Area Code)



     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      . 
                                              -----      -----

     The number of shares of Common Stock of the Registrant, par value $.01 per
share, outstanding at July 10, 1997, was 37,632,596.


<PAGE>   2


                                  REPORT INDEX



<TABLE>
<S>                                                                                         <C>
PART AND ITEM NO.                                                                           PAGE NO.
- -----------------                                                                           --------

PART I - Financial Information

     Item 1 - Financial Statements

     General Information    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    1

     Condensed Consolidated Balance Sheets as of May 31, 1997 (unaudited)
         and August 31, 1996    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    2

     Condensed Consolidated Statements of Income for the Nine and Three Months
        Ended May 31, 1997 and May 31, 1996 (unaudited)   . . . . . . . . . . . . . . . . . . . .    3

     Condensed Consolidated Statements of Cash Flows for the Nine Months
        Ended May 31, 1997 and May 31, 1996 (unaudited)   . . . . . . . . . . . . . . . . . . . .    4

     Notes to Condensed Consolidated Financial Statements (unaudited)   . . . . . . . . . . . . .    5

     Item 2 - Management's Discussion and Analysis of Financial Condition
                  and Results of Operations   . . . . . . . . . . . . . . . . . . . . . . . . . .    8

PART II - Other Information

     Item 1 - Legal Proceedings   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   13

     Item 2 - Changes in Securities   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   13

     Item 6 - Exhibits and Reports on Form 8-K    . . . . . . . . . . . . . . . . . . . . . . . .   13
</TABLE>



<PAGE>   3
                     PART I, ITEM 1 - FINANCIAL INFORMATION
                              GENERAL INFORMATION

       The condensed consolidated financial statements herein have been
prepared by the Company without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission (the "SEC").  As applicable under such
regulations, certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted.  The Company believes that the
presentation and disclosures herein are adequate to make the information not
misleading, and the financial statements reflect all elimination entries and
normal adjustments which are necessary for a fair statement of the results for
the nine and three months ended May 31, 1997 and May 31, 1996.

       Operating results for interim periods are not necessarily indicative of
the results for full years.  It is suggested that these condensed consolidated
financial statements be read in conjunction with the consolidated financial
statements for the fiscal year ended August 31, 1996 and the related notes
thereto included in the Company's Annual Report on Form 10-K, filed with the 
SEC, and the Company's Proxy Statement dated June 30, 1997, included in the
Registration Statement on Form F-4 of Philip Services Corp. ("Philip"),
formerly Philip Environmental Inc., filed with the SEC on April 22, 1997, in
connection with the acquisition of the Company by Philip.



                                      -1-
<PAGE>   4
                        ALLWASTE, INC. AND SUBSIDIARIES

                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                       May 31,             August 31,
                                                                         1997                 1996   
                                                                      ----------           ----------
                                                                      (Unaudited)           (Audited)
<S>                                                                  <C>                      <C>
                                   ASSETS
CURRENT ASSETS:
  Cash and cash equivalents                                           $     2,017          $     2,436
  Receivables, net                                                         86,326               75,114
  Prepaid expenses                                                          9,105                3,796
  Deferred income taxes and other assets                                    8,208               11,170
                                                                      -----------          -----------

   Total current assets                                                   105,656               92,516
                                                                      -----------          -----------

INVESTMENTS                                                                16,986               11,030

PROPERTY AND EQUIPMENT, at cost                                           256,344              248,280
  Less -- Accumulated depreciation                                       (130,288)            (119,307)
                                                                      ----------           ---------- 
                                                                          126,056              128,973
                                                                      -----------          -----------

GOODWILL, net of accumulated amortization                                  85,529               88,032

NOTES RECEIVABLE                                                           11,840               13,517

OTHER ASSETS                                                                3,203                3,119
                                                                      -----------          -----------

   Total assets                                                       $   349,270          $   337,187
                                                                      ===========          ===========

                    LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable                                                    $    22,394          $    19,250
  Accrued liabilities:
   Income taxes payable                                                       689                5,383
   Other                                                                   35,987               42,892
  Current maturities of long-term and convertible subordinated debt         2,447                6,249
                                                                      -----------          -----------
   Total current liabilities                                               61,517               73,774
                                                                      -----------          -----------
LONG-TERM DEBT, net of current maturities                                 103,045               87,971

CONVERTIBLE SUBORDINATED DEBT, net of current maturities                   32,259               33,924

DEFERRED INCOME TAXES AND OTHER LIABILITIES                                12,796               10,572

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:
  Common Stock                                                                404                  398
  Additional paid-in capital                                               62,196               55,699
  Retained earnings                                                        91,389               84,163
                                                                      -----------          -----------
                                                                          153,989              140,260
  Less:
   Treasury Stock                                                         (13,756)              (8,561)
   Unearned compensation related to outstanding 
       restricted Common Stock                                               (580)                (753)
                                                                      -----------          -----------
     Total shareholders' equity                                           139,653              130,946
                                                                      -----------          -----------
     Total liabilities and shareholders' equity                       $   349,270          $   337,187
                                                                      ===========          ===========
</TABLE>

See Notes to Condensed Consolidated Financial Statements.



                                      -2-
<PAGE>   5
                        ALLWASTE, INC. AND SUBSIDIARIES

                  CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                  (UNAUDITED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)


<TABLE>
<CAPTION>
                                              For the Nine Months Ended         For the Three Months Ended     
                                            --------------------------------    --------------------------
                                                May 31,        May 31,            May 31,        May 31,
                                                 1997            1996              1997            1996
                                                 ----            ----              ----            ----
                                             
<S>                                             <C>            <C>                <C>             <C>
REVENUES                                        $295,392       $286,807           $105,374        $98,731

COST OF OPERATIONS                               218,690        213,901             76,236         72,237
                                                --------       --------           --------        ------- 
   Gross profit                                   76,702         72,906             29,138         26,494

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES      57,082         60,156             20,076         19,815

INTEREST EXPENSE                                  (7,282)        (7,327)            (2,522)        (2,506)
INTEREST INCOME                                    1,082            773                602            280
OTHER INCOME (EXPENSE), net                        1,001          1,263                158            535
                                                --------       --------           --------        ------- 

   Income from continuing operations before
     income tax provision and minority interest   14,421          7,459              7,300          4,988

INCOME TAX PROVISION                              (6,562)        (3,580)            (3,322)        (2,443)
MINORITY INTEREST, net of taxes                     (117)            62                (16)            38
                                                --------       --------           --------        ------- 

   Income from continuing operations               7,742          3,941              3,962          2,583

   Discontinued Operations
     Gain on sale of glass recycling operations,
       net of applicable income taxes                 --          3,764                 --             --
                                                --------       --------           --------        ------- 
       Net income                                 $7,742         $7,705             $3,962         $2,583
                                                ========       ========           ========        ======= 
NET INCOME PER COMMON SHARE:
   Continuing operations                            $.21           $.10               $.10           $.07
   Discontinued operations                            --            .10                 --             --
                                                --------       --------           --------        ------- 
       Net income per common share                  $.21           $.20               $.10           $.07
                                                ========       ========           ========        ======= 

WEIGHTED AVERAGE NUMBER OF COMMON
   SHARES OUTSTANDING                             37,592         39,262             38,678         39,063
                                                ========       ========           ========        ======= 

</TABLE>

See Notes to Condensed Consolidated Financial Statements.



                                      -3-
<PAGE>   6
                        ALLWASTE, INC. AND SUBSIDIARIES

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                           (UNAUDITED, IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                             For the Nine Months Ended  
                                                                          ------------------------------
                                                                            May 31,            May 31,
                                                                              1997               1996   
                                                                          -----------         ----------
<S>                                                                      <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

   Net income                                                             $    7,742          $   7,705

   Reconciliation of net income to cash provided by operating activities:
     Depreciation                                                             20,848             21,537
     Amortization                                                              2,313              2,097
     Gain on sale of glass recycling operations                                   --             (3,764)
     (Gain) loss on sale of property and equipment                               365               (821)
     Common Stock received in lawsuit settlement                                (854)                --
     Amortization of unearned compensation - restricted stock                    173                 95
     Change in assets and liabilities, net of effect of acquisitions
       accounted for as purchases:
           Receivables, net                                                  (11,240)            (1,176)
           Prepaid expenses and other current assets                          (2,347)            (2,108)
           Notes receivable and other assets                                    (759)                25
           Accounts payable and accrued liabilities                           (8,081)            (9,361)
           Deferred income taxes and other non cash items                      2,232              2,223
                                                                          ----------          ---------

       Cash provided by operating activities                                  10,392             16,452
                                                                          ----------          ---------

CASH FLOWS FROM INVESTING ACTIVITIES:

   Proceeds from sale of glass recycling operations                             --               41,500
   Additions to property and equipment                                       (21,880)           (23,265)
   Purchase of long-term investment, net of debt issued                       (5,965)            (2,619)
   Proceeds from sales of property and equipment                               4,903              2,893
   Payments for acquisitions accounted for as purchases, net of
     cash acquired                                                                --             (1,113)
                                                                          ----------          ---------
       Cash provided by (used in) investing activities                       (22,942)            17,396
                                                                          ----------          ---------
CASH FLOWS FROM FINANCING ACTIVITIES:

   Proceeds from issuances of Common Stock                                     3,163                553
   Net increase (decrease) in revolving credit facility                       15,180            (28,370)
   Net increase (decrease) in other long term borrowings                       2,052               (850)
   Purchases of convertible subordinated debentures                              (19)            (3,264)
   Increases in Treasury Stock                                                (7,729)            (5,482)
                                                                          ----------          ---------
       Cash provided by (used in) financing activities                        12,647            (37,413)
                                                                          ----------          ---------
EFFECT OF EXCHANGE RATE CHANGES                                                 (516)             (144)
                                                                          ----------          ---------
DECREASE IN CASH AND CASH EQUIVALENTS                                           (419)            (3,709)
CASH AND CASH EQUIVALENTS, beginning of period                                 2,436              4,029
                                                                          ----------          ---------
CASH AND CASH EQUIVALENTS, end of period                                  $    2,017          $     320
                                                                          ==========          =========

</TABLE>


 See Notes to Condensed Consolidated Financial Statements.


                                      -4-
<PAGE>   7

                        ALLWASTE, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)


(1)   Significant Accounting Policies --

      The condensed consolidated financial statements include the accounts of
Allwaste, Inc. and its subsidiaries (the "Company"). There have been no
significant changes in the accounting policies of the Company during the
periods presented.  For a description of these policies, see Note 1 of Notes to
Consolidated Financial Statements in the Company's Annual Report on Form 10-K
for the fiscal year ended August 31, 1996 and the Company's Proxy Statement
dated June 30, 1997, included in the Registration Statement on Form F-4 of
Philip Services Corp. ("Philip"), formerly Philip Environmental Inc., filed
with the SEC on April 22, 1997, in connection with the acquisition of the
Company by Philip. Certain prior period amounts have been reclassified to
conform with the current period presentation.

      On March 6, 1997, the Company announced that a definitive agreement had
been reached to merge with Philip. The agreement is subject to stockholder
approval, regulatory approvals and certain other conditions. All necessary
regulatory approvals required by the agreement have been met. Upon receiving
stockholder approval and the satisfaction of certain other conditions, the 
Company will become an indirect wholly-owned subsidiary of Philip. Under the 
terms of the agreement, each share of Allwaste Common Stock will be exchanged 
for 0.611 shares of Philip Common Stock.  

(2)   Acquisitions and Investments --

      On January 31, 1997, the Company exercised warrants to purchase
additional shares of The Safe Seal Company, Inc.  ("Safe Seal"). Consideration
for this increase in the investment from 10% to 36.5% included three
subordinated notes totaling $3.3 million and cash of $0.6 million. The Company
now owns 2,502,518 shares of common stock and 20,000 shares of redeemable Class
A preferred stock of Safe Seal for a total investment of $6.6 million
(including goodwill of $2.9 million). The Company appropriately changed its
method of accounting for the investment from the cost method to the equity
method. The effect of this change on the Company's financial statements for
prior periods presented is immaterial and accordingly they have not been
restated. The Company's equity in losses (net of goodwill amortization over 40
years) for the nine and three months ended May 31, 1997 was $9 thousand. The 
Company also guarantees $17.8 million of indebtedness for Safe Seal and its 
affiliates.

(3)   Income Taxes --

      With respect to continuing operations, income tax provisions for interim
periods are estimated based on projections of the annual effective tax rates.
Certain assumptions have been made in this regard in estimating the effective
tax rate for fiscal 1997, the outcome of which may not be resolved until the
end of the fiscal year. The effective tax rate of 46% for the nine months ended
May 31, 1997 reflects the estimated U.S. federal and state income taxes and
foreign taxes on the earnings of the Company's foreign subsidiaries.

      Deferred tax assets and liabilities are determined based on the estimated
future tax effects of differences between the financial statement and tax bases
of assets and liabilities. On the accompanying Condensed Consolidated Balance
Sheets, deferred tax assets and liabilities are netted within each tax
jurisdiction. The following table sets forth the gross deferred tax assets
(liabilities) recorded (in thousands):

<TABLE>
<CAPTION>
                                                              May 31,             August 31,
                                                               1997                   1996   
                                                           -------------        -------------
      <S>                                                  <C>                  <C>
      Current deferred tax assets                          $     7,262          $     8,681
      Non-current deferred tax assets                              183                3,383
      Valuation allowance                                       (1,230)              (1,230)
                                                           -----------           ---------- 
         Total deferred tax assets                               6,215               10,834
                                                           -----------          -----------
      
      Non-current deferred tax liabilities                 $  (12,273)          $  (13,238)
                                                           ----------           ---------- 
      Net deferred tax liabilities                         $   (6,058)          $   (2,404)
                                                           ==========           ========== 
</TABLE>



                                     -5-
<PAGE>   8

        The components of the net deferred tax assets (liabilities) are as
follows (in thousands):

<TABLE>
<CAPTION>
                                                                 May 31,             August 31,
                                                                  1997                   1996   
                                                              -------------        -------------

         <S>                                                  <C>                  <C>
         Depreciation and amortization                        $   (17,766)          $  (15,753)
         Financial reserves and accruals
          not yet deductible                                       11,708               13,349
                                                              -----------          -----------

            Total                                             $   (6,058)          $   (2,404)
                                                              ==========           ========== 
</TABLE>

(4)   Long-Term Debt --

      The Company's long-term debt consists of a revolving credit agreement
with a group of banks. The agreement, as last amended in January 1997, provides
for an unsecured $160 million revolving line of credit to the Company through
January 31, 1999, at which time any outstanding borrowings convert to a term
loan due in equal quarterly installments through January 31, 2003. At July 10,
1997, after utilizing $33.1 million of the credit facility for letters of
credit to secure certain insurance obligations and performance bonds, available
borrowing capacity under this agreement was $24.1 million. Management believes
that the Company was in compliance with all applicable covenants under the
revolving credit agreement as of May 31, 1997. Borrowing availability is
subject to the Company maintaining certain minimum financial ratios as set
forth in the agreement.

(5)    Significant Non-cash Financing Activities --

      During March 1997, the Company issued 79,904 shares of its Common Stock
and 959,277 shares of treasury stock in exchange for $7.6 million of
convertible subordinated notes which were issued as partial consideration to
former owners of certain acquired businesses. At May 31, 1997 and August 31,
1996, the Company had outstanding $1.9 million and $11.0 million, respectively,
of convertible subordinated notes issued as partial consideration to acquire
certain businesses.

(6)   Net Income Per Common Share --

      Net income per common share has been computed based on the weighted
average number of shares of Common Stock and Common Stock equivalents
outstanding. The calculation of fully-diluted net income per common share is
not materially different from the primary calculation. The following table
presents the primary weighted average number of shares outstanding for the nine
and three months ended May 31, 1997 and May 31, 1996 (in thousands):

<TABLE>
<CAPTION>
                                                For the Nine Months Ended      For the Three Months Ended  
                                               ---------------------------    -----------------------------
                                                  May 31,        May 31,        May 31,         May 31,
                                                   1997           1996            1997            1996    
                                                ------------   -----------     -----------     -----------

<S>                                               <C>             <C>            <C>               <C>
Common shares outstanding, beginning
   of fiscal period                                39,799         39,609          39,799           39,609
   Weighted average number of common shares
      outstanding:
      Stock options, treasury stock method            586             73           1,321               30
      Purchased companies                              --             24              --               25
      Exercise of stock options                       140             98             396              136
      Treasury stock and other, net               (2,933)          (542)         (2,838)            (737)
                                                 -------        -------         -------         -------- 
   Total weighted average common shares
      outstanding                                  37,592         39,262          38,678           39,063
                                                 ========       ========        ========        =========
</TABLE>



                                     -6-
<PAGE>   9
(7)   Incentive Plans --

         On October 26, 1995, the Company's Board of Directors adopted a
limited single-purpose incentive plan for certain key employees. Pursuant to
this plan, each participating key employee that purchased shares of the
Company's Common Stock, based on a designated percentage of his annual salary,
was granted a number of shares of restricted Common Stock equal to two times
the number of the shares purchased and an option to purchase a number of shares
of Common Stock equal to four times the number of shares purchased. Shares of
Common Stock issued under this incentive plan were treasury shares. At May 31,
1997, 206,826 shares of restricted Common Stock and options to purchase 423,464
shares of Common Stock had been granted in connection with this incentive plan.
The Company does not contemplate that any additional restricted shares will be
issued under this incentive plan or that any options to purchase shares of
Common Stock will be granted in connection with this plan.

      The value of restricted shares awarded under this incentive plan through
May 31, 1997 was $0.9 million. These amounts were recorded as unearned
compensation related to outstanding restricted stock and are shown as a
separate component of Shareholders' Equity. Unearned compensation is being
amortized to expense over a four-year vesting period and amounted to $0.2
million and $0.1 million for the nine and three months ended May 31, 1997,
respectively.

      Effective September 1, 1996, in connection with the implementation of the
Economic Value Added ("EVA(R)") integrated management system, the Compensation
Committee of the Board of Directors approved the adoption of the Allwaste EVA
Incentive Compensation Plan (the "EVA Plan"). The EVA Plan governs incentive
compensation available to the Company's executive officers and other key
employees. Under the EVA Plan, eligible participants are entitled to receive
incentive payments based on their meeting or exceeding certain thresholds as
established by the Compensation Committee in the case of executive management
and by executive management in the case of other participants. A portion of the
awards for each fiscal year (generally, one-third) carries forward to the
following year and is added to incentive awards earned for that succeeding
fiscal year.

(8)   Discontinued Operations --

      In September 1995, the Company sold its glass recycling operations to
Strategic Holdings, Inc. ("SHI"), a company formed by Equus II, Incorporated
("Equus"). In October 1996, the Company and Equus finalized an agreement with
respect to certain post-closing issues which were unresolved on the date of the
sales transaction. The total consideration, as adjusted, was $56.1 million,
including $41.5 million in cash, $8.0 million of redeemable Series A preferred
stock redeemable beginning in 2002, and a $6.6 million subordinated note
receivable due in 2002. The redeemable Series A preferred stock dividend is
$.065 per share for the period prior to September 1, 1996 and $.06 per share
thereafter. The subordinated note receivable interest rate is 11% for the
period prior to September 1, 1996 and 10.5% thereafter. The agreement also
provided that all dividends and interest due prior to August 31, 1997 will not
be paid when due, but "paid in kind" in the form of two 8.036% subordinated
notes issuable on September 30, 1996 and June 30, 1997 in the amounts of $1.3
million and $0.9 million, respectively. Principal on these two notes will be
due on November 30, 2002.  As of May 31, 1997, the Company had accrued $0.9
million for dividends and $1.4 million for interest. For the nine months ended
May 31, 1997, the Company recognized $0.6 million as interest income and $0.4
million as dividend income which is reflected in other income (expense) in the
accompanying Consolidated Statements of Income. The Company also received
warrants to purchase shares of SHI common stock, providing the Company the
right to own up to approximately 33% of the outstanding stock of SHI. The
Company may receive additional consideration in the form of an adjustment to
the purchase price in the event that Equus' internal rate of return, as
defined, exceeds certain predetermined targets. The amount of such additional
consideration, if any, is not presently determinable. The Company recorded a
gain on the sale of its glass recycling operations of $3.8 million, net of
applicable income taxes of $1.6 million, in the first quarter of fiscal 1996.



                                     -7-
<PAGE>   10
                        ALLWASTE, INC. AND SUBSIDIARIES
             PART I, ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

       For supplemental information, it is suggested that "Management's
Discussion and Analysis of Financial Condition and Results of Operations" be
read in conjunction with the corresponding section included in the Company's
Annual Report on Form 10-K for the fiscal year ended August 31, 1996 and the
Company's Proxy Statement dated June 30, 1997, included in the Registration
Statement on Form F-4 of Philip Services Corp. ("Philip"), formerly Philip
Environmental Inc., filed with the SEC on April 22, 1997, in connection with
the acquisition of the Company by Philip. Additionally, certain prior period
amounts have been reclassified to conform with the current period presentation.

      On March 6, 1997, the Company announced that a definitive agreement had
been reached to merge with Philip. The agreement is subject to stockholder
approval, regulatory approvals and certain other conditions. Upon receiving
stockholder approvals and the satisfaction of certain other conditions, the
Company will become an indirect wholly-owned subsidiary of Philip. All necessary
regulatory approvals required by the agreement have been met. Under the terms of
the agreement, each share of Allwaste Common Stock will be exchanged for 0.611
shares of Philip Common Stock.

RESULTS OF OPERATIONS

     Allwaste, Inc. provides integrated industrial and environmental services
and acts as an outsourcing provider of on-site facility processes and
services, primarily in the United States, Canada, Mexico, and Austria. With the
completion of the sale of the Company's glass recycling operations in September
1995, the Company combined the prior industry segments of environmental
services and container services into a single industrial services operation.

     Net income from continuing operations for the nine and three months ended
May 31, 1997 was $7.7 million and $4.0 million, respectively, compared with
$3.9 million and $2.6 million, respectively, for the same periods in fiscal
1996.  Net income per common share from continuing operations was $.21 and $.10
for the nine and three month periods ended May 31, 1997, respectively, and $.10
and $.07, respectively, for the same prior year periods.

     The Company's revenues for the three months ended May 31, 1997 increased
to $105.4 million compared with $98.7 million in the three months ended May 31,
1996. The increase of 6.7% was internally generated. The Company's revenue
growth was 8.3% for the three months ended May 31, 1997, excluding certain less
profitable scaffolding and transportation services which were sold or
purposefully downsized. The Company's excavation/remediation activities
benefited from a continued increase in pulp and paper and quarry work through
the third quarter of fiscal 1997.  Increased demand for services provided to
the Canadian and United States auto industries, increased services provided to
the power plant industry, and continuing increased demand for the Company's
services by the offshore oil and gas exploration industry in the Gulf of Mexico
area contributed to this growth. Revenues generated by the Company's operations
that service the Pacific and Gulf Coast refining and petrochemical industries
continued to stabilize. While Pacific and Gulf Coast revenues for the nine 
month period are down from last fiscal year, the third quarter revenues 
have improved to equal revenues of the three months ended May 31, 1996.

     Revenues for the nine months ended May 31, 1997 increased 3% to $295.4
million compared with $286.8 million for the nine months ended May 31, 1996.
Continued growth in the Company's excavation/remediation activities, services
provided to the offshore oil and gas exploration industry in the Gulf of Mexico
area, and services provided to the Canadian and United States auto industries
were primarily responsible for a significant portion of the increase in
revenues. This growth was partially offset by decreases attributable to
operations that service the Pacific and Gulf Coast refining and petrochemical
industries, as noted above, and to scaffolding and transportation services that
were purposefully downsized.

     Gross profit increased to $76.7 million and $29.1 million in the nine and
three months ended May 31, 1997, from $72.9 million and $26.5 million in the
nine and three months ended May 31, 1996, respectively. Gross profit, as a
percentage of revenues, increased slightly to 26.0% from 25.4% for the first
nine months of fiscal 1997 compared with the same prior year period and
increased to 27.7% in the third quarter of fiscal 1997 compared with 26.8% for
the third quarter of fiscal 1996. The Company experienced increases in gross
profit in a majority of its industry sectors.  This improvement was generally
attributable to the implementation of ongoing cost reduction



                                     -8-
<PAGE>   11
initiatives started in the first half of fiscal 1996 and revenue volume
increases. The cost reduction initiatives have focused on improvement of
profitability, the creation of shareholder value and enhanced efforts to
provide more cost-effective, value-added service to the Company's large
industrial customer base. The Company's container services line particularly
benefited from its cost reduction initiatives implemented in the second quarter
of fiscal 1996. Gross operating profit, as a percentage of revenues, was also
improved by the contraction and/or divestiture of lower margin businesses
subsequent to the second quarter of fiscal 1996.

     Selling, general and administrative ("SG&A") expenses, as a percentage of
revenues, decreased 1.7% to 19.3% from 21.0% in the nine months ended, and 1.0%
to 19.1% from 20.1% in the three months ended, May 31, 1997. SG&A expenditures
decreased by $3.1 million to $57.1 million for the nine months ended May 31,
1997, compared with $60.2 million for the same period in fiscal 1996. A
significant portion of the improvement was attributable to the cost reduction
initiatives started in the first half of fiscal 1996. The Company incurred
severance costs related to this plan of $1.3 million in the first nine months of
1996. Excluding the effect of these severance costs, SG&A expenditures decreased
by $1.8 million in the first nine months of fiscal 1997 compared with the same
prior year period. For the three months ended May 31, 1997, SG&A expenditures
increased slightly by $0.3 million to $20.1 million compared with $19.8 million
for the same period ended May 31, 1996. This increase is primarily attributable
to the increased business volumes.

     Interest expense remained constant at $7.3 million and $2.5 million in the
nine and three months ended May 31, 1997, respectively, compared with the same
periods in fiscal 1996.

     Interest income and other income (expense), net was $2.1 million and $0.8
million in the nine and three months ended May 31, 1997, respectively, compared
with $2.0 million and $0.8 million in the nine and three months ended May 31,
1996, respectively. The income was primarily related to interest and dividends
earned on the subordinated note receivable and the preferred stock acquired in
the sale of the Company's glass recycling operations and the favorable
settlement of a lawsuit relating to a previously divested business and was 
partially offset by losses recognized on sales of property and equipment.

     The Company's effective income tax rate for the nine months ended May 31,
1997 was 46% compared with 48% for the nine months ended May 31, 1996. The
effective tax rate was higher than the statutory federal rate of 35% primarily
due to the effect of the nondeductibility of a portion of meal and
entertainment expenses, the nondeductible amortization of a portion of the
Company's goodwill, state income taxes and Canadian earnings which are taxed at
a higher statutory rate.

LIQUIDITY AND CAPITAL RESOURCES

     At the end of the second quarter of fiscal 1996, the Company embarked on a
program to more strategically manage its capital resources. The program
culminated in the implementation of the Economic Value Added ("EVA(R)")
integrated management system in September 1996. The Company's EVA management
system recognizes enhanced capital management through a cost of capital charge
in its measurement of operating results.

     Net cash provided by the Company's operating activities was $10.4 million
during the nine months ended May 31, 1997, compared with $16.5 million for the
same prior year period. For the nine months ended May 31, 1997, the Company had
net income of $7.7 million, which included $23.2 million in depreciation and
amortization. For the same period in fiscal 1996, net income was $7.7 million,
which included $23.6 million in depreciation and amortization and a gain on the
sale of the Company's glass recycling operation of $3.8 million in the first
quarter of fiscal 1996. Working capital was $44.1 million at May 31, 1997
compared with $25.9 million at May 31, 1996. Net working capital increases were
primarily attributable to increased accounts receivable due to increased sales
volumes during the quarter ended May 31, 1997 and decreases in accrued
liabilities from August 31, 1996 primarily due to payments of income taxes and
payments related to prior policy years under the Company's insurance programs
that were accrued and outstanding at August 31, 1996. 

     The Company used cash of $22.9 million in investing activities in the nine
months ended May 31, 1997, compared with cash of $17.4 million provided in the
nine months ended May 31, 1996. The $17.4 million cash provided in the nine
months ended May 31, 1996 included $41.5 million of cash received from the sale
of the Company's former glass recycling operations in September 1995. The use of
cash in the nine months ended May 31,



                                     -9-
<PAGE>   12
1997 was primarily attributable to capital expenditures of $21.9 million
compared with $23.3 million of capital expenditures in the same prior year
period. The Company was able to reduce its capital spending in fiscal 1997
primarily due to increased monitoring of equipment utilization, transfers of
underutilized owned equipment from lower volume, lower margin locations to
higher volume, higher margin locations and the use of short-term equipment
rentals.  Expenditures for the remainder of fiscal 1997 are anticipated to be
approximately $8.3 million. The Company's fiscal 1997 capital expenditure
program will be funded from cash flows from operating activities.

     The Company paid $2.6 million in the first quarter of 1996 to acquire a
10% interest in The Safe Seal Company, Inc.  ("Safe Seal") which specializes in
valve repair and leak sealing services. The Company increased its investment by
an additional $3.9 million in the second quarter of fiscal 1997, which
consisted of $0.6 million of cash and $3.3 million of subordinated notes, which
increased its equity interest in Safe Seal to 36.5%. The Company paid $1.7
million in the first quarter of fiscal 1997 for an additional cash investment
in the Company's previously owned glass recycling operation.

     In the nine months ended May 31, 1997, the Company provided cash from
financing activities of $12.6 million, compared with cash used of $37.4 million
in the same prior year period. The Company's total short-term and long-term
debt increased by $9.6 million to $137.8 million at May 31, 1997 from $128.1
million at August 31, 1996. Included in the aforementioned long-term debt, the
Company's revolving credit facility increased by $15.2 million to $103.0
million at May 31, 1997 from $87.8 million at August 31, 1996. Significant
factors contributing to these increases included tax payments of $5.3 million
attributable to the sale in fiscal 1996 of the Company's glass recycling
division and current year earnings, $7.7 million used to repurchase shares of
the Company's Common Stock, the issuance of $3.3 million in subordinated notes
and $0.6 million in cash used to increase the Company's interest in Safe Seal.
These increases were offset by the retirement of $7.6 million of convertible
subordinated notes, which were originally issued as partial consideration to
former owners of certain acquired businesses, by issuing 79,904 shares of Common
Stock and 959,277 shares of treasury stock. Also, an additional $1.6 million of
convertible subordinated notes were retired by cash payments.

     In July 1995, the Board of Directors authorized the Company to repurchase,
over a two year period, up to 5,000,000 shares of the Company's Common Stock,
either on the open market or in privately negotiated transactions. During the
nine months ended May 31, 1997, the Company spent $7.7 million to repurchase
1,649,500 shares of its Common Stock at an average cost of $4.67 per share.
Subsequent to May 31, 1997, the Company has repurchased no additional shares of
its Common Stock. As of May 31, 1997, 3,725,400 shares of Common Stock had been
repurchased under the plan at an average cost of $4.54 per share. At May 31,
1997, after issuing shares from treasury stock, predominately for the previously
mentioned conversion of convertible subordinated notes the Company held 
2,866,976 shares of its Common Stock as treasury stock.

     The Company's long-term debt consists of a revolving credit agreement with
a group of banks. The agreement, as last amended in January 1997, provides for
an unsecured $160 million revolving line of credit to the Company through
January 31, 1999, at which time any outstanding borrowings convert to a term
loan due in equal quarterly installments through January 31, 2003. At July 10,
1997, after utilizing $33.1 million of the credit facility for letters of
credit to secure certain insurance obligations and performance bonds, available
borrowing capacity under this agreement was $24.1 million. Borrowing
availability is subject to the Company maintaining certain minimum financial
ratios as set forth in the agreement. The Company believes that its cash flows
provided by operating activities and available funds under its revolving credit
agreement are adequate to fund its financing needs.

     Management believes it has adequate capital resources available from
internally generated funds and from the Company's revolving credit agreement to
meet anticipated working capital needs, planned capital expenditures and to
take advantage of new opportunities requiring capital.

FLUCTUATIONS IN RESULTS OF OPERATIONS

     Certain customers have varying levels of demand for the Company's services
based on the time of the year. Most of the Company's service lines tend to be
slowest in the winter (the Company's second fiscal quarter) and summer (the
Company's fourth fiscal quarter) months. Services provided to electric utility
customers are typically performed in the fall and spring when demand for
electricity is reduced and maintenance work can be performed more efficiently.
Likewise, services provided to refining and petrochemical customers tend to be
greater in the fall and spring when most




                                     -10-
<PAGE>   13
planned turnarounds at customer plants occur. In addition, the Company's
acquisition program can affect not only future results and rates of growth but
also previously reported results because of restatements if acquisitions are
accounted for as poolings-of-interests.

     The impact of inflation on the Company has been minimal.

OUTLOOK FOR 1997

     On March 6, 1997, the Company announced that a definitive agreement had
been reached to merge with Philip. The agreement is subject to stockholder
approval, regulatory approvals and certain other conditions. Upon receiving
stockholder approval and the satisfaction of other certain conditions, the
Company will become an indirect wholly-owned subsidiary of Philip. All
regulatory approvals have been met. Under the terms of the agreement, each share
of Allwaste Common Stock will be exchanged for 0.611 shares of Philip Common
Stock.

     The Company has clearly defined the industrial customer as the focus of
its business strategy. The Company's fiscal 1996 sale of its glass recycling
operations has allowed it to narrow its focus on providing services to the
industrial customer and provided additional capital for expansion of this core
business and for development of opportunities independently or through
partnering arrangements in the areas of water and wastewater management, energy
services, contract labor services and, through its investment in Safe Seal,
leak sealing and valve restoration services. The Company will continue to
evaluate its complement of services offered and allocate capital accordingly.

     The Company has historically focused on achieving growth through
acquisitions; however, in recent years, the Company has placed added emphasis
on increased internal growth. Although the Company will continue to focus on
internal growth, it does intend to evaluate acquisitions that fit its strategic
goals. The Company has focused on realizing increased internal growth primarily
by developing new outsourcing and co-sourcing opportunities with its customers
and expanding the number of service lines offered to customers by each of its
operating locations, providing solution-oriented and preventive services that
focus on improving customer efficiency and profitability, transferring
technology and knowledge among the Company's various operating locations,
implementing national marketing programs that target major industries served by
the Company, introducing services in new geographic areas and developing
services that address environmental concerns associated with new products. The
Company's ALLIES(R) program stresses collaboration between the Company and its
customers by focusing on creating flexible and innovative solutions to a
customer's problems and emphasizing the Company's services as an
economically-efficient outsourcing alternative that can maximize a customer's
competitive role in the emerging global market.

     The Company is also focusing on cost control and gross margin expansion
through fiscal 1997. The Company intends to implement selected price increases
when market conditions permit and as a by-product of value-added selling
efforts. The Company anticipates savings resulting from the cost reduction in
fiscal 1996 and ongoing cost-reduction initiatives to continue to positively
affect its results of operations in fiscal 1997.

     A significant amount of the Company's revenues from its services are
generated on an as needed basis or from irregularly scheduled customer
turnarounds, outages and shutdowns. Although the Company may be chosen as the
vendor of choice, turnarounds, outages and shutdowns may, at the election of
the customers, be deferred or canceled without penalty. The Company is also
affected by business cycles experienced by its industrial customer bases and by
changes in environmental laws and regulations or by changes in the
interpretation or enforcement of such laws and regulations. The Company's
customers have a significant capacity in the short-term to defer industrial
cleaning, maintenance and disposal services. Deferrals can occur either due to
a reduction in maintenance or capital funds, customer budget restraints or,
conversely, increased demand for a customer's products that make it impractical
to perform cleaning and maintenance on anticipated schedules. These factors
make it difficult to predict, from quarter to quarter, the demand for the
Company's services.

NEW FINANCIAL ACCOUNTING STANDARDS

     In March 1995, the Financial Accounting Standards Board issued SFAS No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of" which is effective for years beginning after December
15, 1995 (fiscal 1997 for the Company). This statement established criteria for
recognizing, measuring and


                                     -11-

<PAGE>   14
disclosing impairments of long-lived assets, identifiable intangibles and
goodwill. The Company has adopted SFAS No. 121 effective in fiscal year 1997.
Management does not expect that the adoption will have a material effect on the
Company's financial position or results of operations.

     In October 1995, the Financial Accounting Standards Board issued SFAS No.
123, "Accounting for Stock-Based Compensation" which is effective for years
beginning after December 15, 1995 (fiscal 1997 for the Company). This statement
allows entities to choose between a new fair value based method of accounting
for employee stock options or similar equity instruments and the current
intrinsic value-based method of accounting prescribed by Accounting Principles
Board Opinion No. 25. Entities electing to remain with the accounting in APB
Opinion No. 25 must make pro forma disclosures of net income and earnings per
share as if the fair value method of accounting had been applied. The Company
expects to continue accounting for employee stock options and similar equity
instruments in accordance with APB Opinion No. 25. The pro forma effect for
fiscal 1996 has not yet been determined.

     In February 1997, the Financial Standards Accounting Board issued SFAS No.
128, "Earnings per Share" which is effective for years ending after December
15, 1997 (fiscal 1998 for the Company). This statement specifies the
computation, presentation, and disclosure requirements for earnings per share
("EPS") for entities with publicly held common stock or potential common stock
in order to simplify the computation of EPS and to make the U.S. standards
comparable to international EPS standards. The Company will adopt SFAS No. 128
in the first quarter of fiscal 1998. Upon adoption, all prior period earnings
per share data presented must be restated to conform with the new statement.
Management does not expect that the adoption will have a material effect on the
Company's EPS calculation.

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

     Certain sections of this Report, specifically the section captioned
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," may include "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995 relating to management's
current expectations regarding the future results of operations or financial
condition of the Company. These forward-looking statements may be identified by
the use of forward-looking terminology such as "may," "will," "believe,"
"anticipate," "should," or comparable terms or the negative thereof. These
statements are based solely on data currently available, which data is subject
to change as a result of changes in conditions and should not therefore be
viewed as assurance regarding the Company's future performance. These
statements involve risks and uncertainties that could cause the actual results
to differ materially from those described in the statements. In addition to the
risks and uncertainties specifically described in the section captioned
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Outlook for 1997," these forward-looking statements may also be
affected by the following risks and uncertainties: the effect of economic and
market conditions; the impact of costs, insurance recoveries and governmental,
judicial and other third party interpretation and determination in connection
with legal and environmental proceedings; and the impact of current, pending or
future legislation or regulations (collectively, the "Cautionary Statements").
Although the Company believes that the expectations reflected in any
forward-looking statements contained herein are reasonable, it can give no
assurance that such expectations will prove to have been correct. All
subsequent written and oral forward-looking statements attributable to the
Company or persons acting on its behalf are expressly qualified in their
entirety by the Cautionary Statements contained herein.




                                      -12-
<PAGE>   15
ITEM 1 - LEGAL PROCEEDINGS

     In November 1996, the West Virginia Division of Environmental Protection
(the "West Virginia DEP") issued a draft consent order against one of the
Company's subsidiaries, which order sought to impose an aggregate of
approximately $229,000 in fines against the Company relating to a
transportation-related spill in West Virginia in November 1995.  The Company
had voluntarily remediated this spill in December 1995.  The draft consent
order alleged that in remediating the spill, the Company did not comply with
certain technical West Virginia DEP remediation regulations relating to
recordkeeping and generator requirements.  In July 1997, the Company finalized
negotiations with the West Virginia DEP of a final consent order, pursuant to
which the Company agreed to pay an aggregate of $137,750 to the West Virginia
DEP (consisting of $130,000 in penalties and $7,750 in costs incurred by the
West Virginia DEP).

ITEM 2 - CHANGES IN SECURITIES

   The Company did not sell any unregistered securities during the third
quarter of fiscal 1997.

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits.

     Exhibit
       No.         Description
     -------       -----------

       3.1    --   Amended and Restated Certificate of Incorporation of
                   Allwaste, Inc. ("Allwaste"), effective February 22, 1990.
                   (Exhibit 3.1 to the Allwaste Quarterly Report on Form 10-Q
                   (File No. 0- 15217) for the fiscal quarter ended February
                   28, 1990 is hereby incorporated by reference.)
        
       3.2    --   Corrected Bylaws of Allwaste (Exhibit 3.2 to the Allwaste
                   Annual Report on Form 10-K (File No. 1-11008) for the
                   fiscal year ended August 31, 1992, filed November 27, 1992
                   (the "1992 10-K"), is hereby incorporated by reference.)
        
       3.3    --   Certificate of Designation of Series One Junior
                   Participating Preferred Stock of Allwaste, Inc., effective
                   November 19, 1996.  (Exhibit 3.3 to the Allwaste Annual
                   Report on Form 10-K for the fiscal year ended August 31,
                   1996 (the "1996 10-K") is hereby incorporated by
                   reference.)
        
       4.1    --   Specimen Common Stock certificate (Exhibit 4.1 to the
                   Allwaste Quarterly Report on Form 10-Q (File No. 1-11016)
                   for the fiscal quarter ended February 29, 1996 (the
                   "February 10-Q") is hereby incorporated by reference.)
        
       4.2    --   Specimen debenture certificate (Exhibit 4.2 to the 1992
                   10-K is hereby incorporated by reference.)
        
       4.3    --   Form of Indenture between Allwaste and Texas Commerce Trust
                   Company of New York dated June 1, 1989, relating to certain
                   debentures of Allwaste.  (Exhibit 4.1 to the Allwaste
                   Quarterly Report on Form 10-Q (File No. 0-15217) for the
                   fiscal quarter ended May 31, 1989 is hereby incorporated by
                   reference.)
        
       4.4    --   Stockholder Rights Agreement dated August 5, 1996, between
                   Allwaste and American Stock Transfer & Trust Company as
                   Rights Agent.  (Exhibit 1 to the Allwaste, Inc.
                   Registration Statement on Form 8-A, filed November 14,
                   1996, is hereby incorporated by reference.)
        
       4.5    --   First Amendment to Stockholder Rights Agreement dated
                   effective as of March 5, 1997, by and between Allwaste and
                   American Stock Transfer and Trust Company as Rights Agent
                   (Exhibit 1.2 to Allwaste Registration Statement on Form
                   8-A/A-2 (File No. 1-11016), filed April 24, 1997, is hereby 
                   incorporated by reference.)



                                    -13-
<PAGE>   16

       10.1    --   Employment Agreement dated October 23, 1986, between R.L.
                    Nelson, Jr. and Allwaste.  (Exhibit 10.1 to the Allwaste
                    Annual Report on Form 10-K (File No. 1-11008) for the
                    fiscal year ended August 31, 1994, filed November 29, 1994
                    (the "1994 10-K"), is hereby incorporated by reference.)

       10.2    --   Employment Agreement dated October 17, 1994, between Robert
                    M. Chiste and Allwaste.  (Exhibit 10.6 to the 1994 10-K is
                    hereby incorporated by reference.)

       10.3    --   Allwaste Amended and Restated 1989 Replacement
                    Non-Qualified Stock Option Plan. (Exhibit A to the Allwaste
                    proxy statement relating to its 1995 annual meeting of
                    stockholders, filed December 20, 1994, is hereby
                    incorporated by reference.)

       10.4    --   Allwaste, Inc. Target 2000:  One, Two, Four Plan.  (Exhibit
                    10.4 to the Allwaste Quarterly Report on Form 10-Q (File
                    No. 1-11008) for the fiscal quarter ended February 29, 1996
                    (the "February 10-Q") is hereby incorporated by reference.)

       10.5    --   Allwaste Employee Retirement Plan.  (Exhibit 4.3 to the
                    Post-Effective Amendment No. 1 to Registration Statement on
                    Form S-8 (File No. 33-37684), filed August 7, 1995, is
                    hereby incorporated by reference.)

       10.6    --   Credit Agreement dated as of November 30, 1993, as amended,
                    by and among Allwaste, the financial institutions signatory
                    thereto, and Texas Commerce Bank National Association, a
                    national banking association, as Agent.  (Exhibit 10.10 to
                    the 1994 10-K is hereby incorporated by reference.)

       10.7    --   Agreement and First Amendment to Credit Agreement dated 
                    January 21, 1994, by and among Allwaste, the financial
                    institutions signatory thereto, and Texas Commerce Bank
                    National Association, a national banking association, as
                    Agent.  (Exhibit 10.7 to the February 10-Q is hereby
                    incorporated by reference.)
        
       10.8    --   Agreement and Second Amendment to Credit Agreement dated 
                    March 20, 1994, by and among Allwaste, the financial
                    institutions signatory thereto, and Texas Commerce Bank
                    National Association, a national banking association, as
                    Agent.  (Exhibit 10.8 to the February 10-Q is hereby
                    incorporated by reference.)
        
       10.9    --   Agreement and Third Amendment to Credit Agreement dated 
                    May 31, 1994, by and among Allwaste, the financial
                    institutions signatory thereto, and Texas Commerce Bank
                    National Association, a national banking association, as
                    Agent.  (Exhibit 10.9 to the February 10-Q is hereby
                    incorporated by reference.)
        
       10.10   --   Agreement and Fourth Amendment to Credit Agreement dated
                    October 18, 1994, by and among Allwaste, the financial
                    institutions signatory thereto, and Texas Commerce Bank
                    National Association, a national banking association, as
                    Agent. (Exhibit 10.10 to the February 10-Q is hereby
                    incorporated by reference.)

       10.11   --   Agreement and Fifth Amendment to Credit Agreement dated
                    August 31, 1995, by and among Allwaste, the financial
                    institutions signatory thereto, and Texas Commerce Bank
                    National Association, a national banking association, as
                    Agent. (Exhibit 10.11 to the February 10-Q is hereby
                    incorporated by reference.)

       10.12   --   First Amendment to Employment Agreement dated as of October
                    26, 1995, between Robert M. Chiste and Allwaste.  (Exhibit
                    10.6 to the Allwaste Annual Report on Form 10-K (File No.
                    1-11016) for the fiscal year ended August 31, 1995, filed
                    November 30, 1995 (the "1995 Form 10-K"), is hereby
                    incorporated by reference.)




                                    -14-


<PAGE>   17
       10.13   --   Agreement and Sixth Amendment to Credit Agreement dated
                    February 29, 1996, by and among Allwaste, the financial
                    institutions signatory thereto, and Texas Commerce Bank
                    National Association, a national banking association, as
                    Agent.  (Exhibit 10.13 to the Allwaste Quarterly Report on
                    Form 10-Q (File No. 1-11016) for the fiscal quarter ended
                    May 31, 1996 (the "May 10-Q") is hereby incorporated by
                    reference.)

       10.14   --   Agreement and Seventh Amendment to Credit Agreement dated
                    August 1, 1996, by and among Allwaste, the financial
                    institutions signatory thereto, and Texas Commerce Bank
                    National Association, a national banking association, as
                    Agent.  (Exhibit 10.14 to the 1996 10-K is hereby
                    incorporated by reference.)

       10.15   --   First Amendment to Employment Agreement dated November 11,
                    1996, between R. L. Nelson, Jr. and Allwaste. (Exhibit
                    10.15 to the 1996 10-K is hereby incorporated by
                    reference.)

       10.16   --   Second Amendment to Employment Agreement dated October 25,
                    1996, between Robert M. Chiste and Allwaste.  (Exhibit
                    10.16 to the 1996 10-K is hereby incorporated by
                    reference.)

       10.17   --   First Amendment to Employment Agreement dated November 11,
                    1996, between William L. Fiedler and Allwaste.  (Exhibit
                    10.17 to the 1996 10-K is hereby incorporated by
                    reference.)

       10.18   --   Employment Agreement dated November 11, 1996, between David
                    E. Fanta and Allwaste.  (Exhibit 10.18 to the 1996 10-K is
                    hereby incorporated by reference.)

       10.19   --   Employment Agreement dated November 11, 1996, between T.
                    Wayne Wren, Jr. and Allwaste.  (Exhibit 10.19 to the 1996
                    10-K is hereby incorporated by reference.)

       10.20   --   Employment Agreement dated November 11, 1996, between James
                    E. Rief and Allwaste.  (Exhibit 10.20 to the 1996 10-K is
                    hereby incorporated by reference.)

       10.21   --   Employment Agreement dated November 11, 1996, between
                    Michael W. Ramirez and Allwaste.  (Exhibit 10.21 to the
                    1996 10-K is hereby incorporated by reference.)

       10.22   --   Executive Severance Agreement dated November 11, 1996,
                    between R. L. Nelson, Jr. and Allwaste.  (Exhibit 10.22 to
                    the 1996 10-K is hereby incorporated by reference.)

       10.23   --   Executive Severance Agreement dated November 11, 1996,
                    between Robert M. Chiste and Allwaste.  (Exhibit 10.23 to
                    the 1996 10-K is hereby incorporated by reference.)

       10.24   --   Executive Severance Agreement dated November 11, 1996,
                    between David E. Fanta and Allwaste.  (Exhibit 10.24 to the
                    1996 10-K is hereby incorporated by reference.)

       10.25   --   Executive Severance Agreement dated November 11, 1996,
                    between T. Wayne Wren, Jr. and Allwaste.  (Exhibit 10.25 to
                    the 1996 10-K is hereby incorporated by reference.)

       10.26   --   Executive Severance Agreement dated November 11, 1996,
                    between James E. Rief and Allwaste.  (Exhibit 10.26 to the
                    1996 10-K is hereby incorporated by reference.)

       10.27   --   Executive Severance Agreement dated November 11, 1996,
                    between William L. Fiedler and Allwaste.  (Exhibit 10.27 to
                    the 1996 10-K is hereby incorporated by reference.)

       10.28   --   Executive Severance Agreement dated November 11, 1996,
                    between Michael W. Ramirez and Allwaste.  (Exhibit 10.28 to
                    the 1996 10-K is hereby incorporated by reference.)

       10.29   --   1996 Interim Management Bonus Plan.  (Exhibit 10.29 to the
                    1996 10-K is hereby incorporated by reference.)




                                    -15-
<PAGE>   18

       10.30   --   Third Amendment to Employment Agreement dated November 11,
                    1996, between Robert M. Chiste and Allwaste.  (Exhibit
                    10.30 to the 1996 10-K is hereby incorporated by
                    reference.)

       10.31   --   Allwaste EVA Incentive Compensation Plan.  (Exhibit 10.31
                    to the 1996 10-K is hereby incorporated by reference.)

       10.32   --   Agreement and Eighth Amendment to Credit Agreement dated
                    December 1, 1996, by and among Allwaste, the financial
                    institutions signatory thereto, and Texas Commerce Bank
                    National Association, a national banking association, as
                    Agent.  (Exhibit 10.32 to the Allwaste Quarterly Report on
                    Form 10-Q for the fiscal quarter ended February 28, 1997
                    (the "February 1997 10-Q" is hereby incorporated by
                    reference.)

       10.33   --   Non-Employee Director Restricted Stock Plan.  (Exhibit
                    10.33 to the February 1997 10-Q is hereby incorporated by
                    reference.)

       10.34   --   Interim Deferred Compensation Plan.  (Exhibit 10.34 to the
                    February 1997 10-Q is hereby incorporated by reference.)

       10.35   --   Agreement and Ninth Amendment to Credit Agreement dated
                    January 10, 1997, by and among Allwaste, the financial
                    institutions signatory thereto, and Texas Commerce Bank
                    National Association, a national banking association, as
                    Agent.  (Filed herewith.)

       10.36   --   Allwaste Deferred Compensation Plan Trust Agreement dated
                    effective as of May 15, 1997.  (Filed herewith).

       10.37   --   Allwaste Deferred Compensation Plan dated effective as of
                    May 15, 1997.  (Filed herewith.)

       10.38   --   Allwaste Supplemental Executive Retirement Plan dated
                    effective as of January 1, 1997.  (Filed herewith.)

       10.39   --   Agreement and Plan of Merger dated March 5, 1997, by and
                    among Philip Environmental Inc. (now known as Philip
                    Services Corp.), Taro Aggregates Ltd., Philip/Atlas Merger
                    Corp. and Allwaste.  (Exhibit 99.2 to the Allwaste Current
                    Report on Form 8-K dated March 6, 1997, filed April 4,
                    1997, is hereby incorporated by reference.)

       10.40   --   First Amendment to the Allwaste EVA Incentive Compensation
                    Plan.  (Filed herewith.)

       10.41   --   Corrective Amendment to the Allwaste, Inc. Amended and
                    Restated 1989 Replacement Non-Qualified Stock Option Plan.
                    (Filed herewith.)

       10.42   --   Amendment and Restatement of Executive Severance Agreement
                    dated March 5, 1997, between Allwaste and Robert M. Chiste.
                    (Filed herewith.)

       10.43   --   Amendment and Restatement of Executive Severance Agreement
                    dated March 5, 1997, between Allwaste and David E. Fanta.
                    (Filed herewith.)

       10.44   --   Amendment and Restatement of Executive Severance Agreement
                    dated March 5, 1997, between Allwaste and William L.
                    Fiedler.  (Filed herewith.)
        
       10.45   --   Amendment and Restatement of Executive Severance Agreement
                    dated March 5, 1997, between Allwaste and R. L. Nelson, Jr.
                    (Filed herewith.)

       10.46   --   Amendment and Restatement of Executive Severance Agreement
                    dated March 5, 1997, between Allwaste and Michael W.
                    Ramirez.  (Filed herewith.)



                                      -16-
<PAGE>   19

       10.47   --   Amendment and Restatement of Executive Severance Agreement
                    dated March 5, 1997, between Allwaste and James E. Rief.
                    (Filed herewith.)

       10.48   --   Amendment and Restatement of Executive Severance Agreement
                    dated March 5, 1997, between Allwaste and T. Wayne Wren, Jr.
                    (Filed herewith.)

       27.1    --   Financial Data Schedule.  (Filed herewith.)

        (b)   Reports on Form 8-K.

            Allwaste, Inc. (the "Company") Current Report on Form 8-K dated
         March 6, 1997, filed April 4, 1997, related to the proposed merger of
         Philip/Atlas Merger Corp., an indirect wholly-owned subsidiary of
         Philip Environmental Inc. (now known as Philip Services Corp.) and the
         Company.









                                      -17-
<PAGE>   20
                                   SIGNATURE


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

                                        ALLWASTE, INC.


Dated: July 14, 1997                    By: /s/ T. Wayne Wren, Jr.
                                            -----------------------------------
                                            T. Wayne Wren, Jr.
                                            Senior Vice President - Chief 
                                            Financial Officer and Treasurer





                                      -18-
<PAGE>   21

                                 EXHIBIT INDEX

     Exhibit
       No.         Description
     -------       -----------

       3.1    --   Amended and Restated Certificate of Incorporation of
                   Allwaste, Inc. ("Allwaste"), effective February 22, 1990.
                   (Exhibit 3.1 to the Allwaste Quarterly Report on Form 10-Q
                   (File No. 0- 15217) for the fiscal quarter ended February
                   28, 1990 is hereby incorporated by reference.)
        
       3.2    --   Corrected Bylaws of Allwaste (Exhibit 3.2 to the Allwaste
                   Annual Report on Form 10-K (File No. 1-11008) for the
                   fiscal year ended August 31, 1992, filed November 27, 1992
                   (the "1992 10-K"), is hereby incorporated by reference.)
        
       3.3    --   Certificate of Designation of Series One Junior
                   Participating Preferred Stock of Allwaste, Inc., effective
                   November 19, 1996.  (Exhibit 3.3 to the Allwaste Annual
                   Report on Form 10-K for the fiscal year ended August 31,
                   1996 (the "1996 10-K") is hereby incorporated by
                   reference.)
        
       4.1    --   Specimen Common Stock certificate (Exhibit 4.1 to the
                   Allwaste Quarterly Report on Form 10-Q (File No. 1-11016)
                   for the fiscal quarter ended February 29, 1996 (the
                   "February 10-Q") is hereby incorporated by reference.)
        
       4.2    --   Specimen debenture certificate (Exhibit 4.2 to the 1992
                   10-K is hereby incorporated by reference.)
        
       4.3    --   Form of Indenture between Allwaste and Texas Commerce Trust
                   Company of New York dated June 1, 1989, relating to certain
                   debentures of Allwaste.  (Exhibit 4.1 to the Allwaste
                   Quarterly Report on Form 10-Q (File No. 0-15217) for the
                   fiscal quarter ended May 31, 1989 is hereby incorporated by
                   reference.)
        
       4.4    --   Stockholder Rights Agreement dated August 5, 1996, between
                   Allwaste and American Stock Transfer & Trust Company as
                   Rights Agent.  (Exhibit 1 to the Allwaste, Inc.
                   Registration Statement on Form 8-A, filed November 14,
                   1996, is hereby incorporated by reference.)
        
       4.5    --   First Amendment to Stockholder Rights Agreement dated
                   effective as of March 5, 1997, by and between Allwaste and
                   American Stock Transfer and Trust Company as Rights Agent
                   (Exhibit 1.2 to Allwaste Registration Statement on Form
                   8-A/A-2 (File No. 1-11016), filed April 24, 1997, is hereby 
                   incorporated by reference.)



<PAGE>   22

       10.1    --   Employment Agreement dated October 23, 1986, between R.L.
                    Nelson, Jr. and Allwaste.  (Exhibit 10.1 to the Allwaste
                    Annual Report on Form 10-K (File No. 1-11008) for the
                    fiscal year ended August 31, 1994, filed November 29, 1994
                    (the "1994 10-K"), is hereby incorporated by reference.)

       10.2    --   Employment Agreement dated October 17, 1994, between Robert
                    M. Chiste and Allwaste.  (Exhibit 10.6 to the 1994 10-K is
                    hereby incorporated by reference.)

       10.3    --   Allwaste Amended and Restated 1989 Replacement
                    Non-Qualified Stock Option Plan. (Exhibit A to the Allwaste
                    proxy statement relating to its 1995 annual meeting of
                    stockholders, filed December 20, 1994, is hereby
                    incorporated by reference.)

       10.4    --   Allwaste, Inc. Target 2000:  One, Two, Four Plan.  (Exhibit
                    10.4 to the Allwaste Quarterly Report on Form 10-Q (File
                    No. 1-11008) for the fiscal quarter ended February 29, 1996
                    (the "February 10-Q") is hereby incorporated by reference.)

       10.5    --   Allwaste Employee Retirement Plan.  (Exhibit 4.3 to the
                    Post-Effective Amendment No. 1 to Registration Statement on
                    Form S-8 (File No. 33-37684), filed August 7, 1995, is
                    hereby incorporated by reference.)

       10.6    --   Credit Agreement dated as of November 30, 1993, as amended,
                    by and among Allwaste, the financial institutions signatory
                    thereto, and Texas Commerce Bank National Association, a
                    national banking association, as Agent.  (Exhibit 10.10 to
                    the 1994 10-K is hereby incorporated by reference.)

       10.7    --   Agreement and First Amendment to Credit Agreement dated 
                    January 21, 1994, by and among Allwaste, the financial
                    institutions signatory thereto, and Texas Commerce Bank
                    National Association, a national banking association, as
                    Agent.  (Exhibit 10.7 to the February 10-Q is hereby
                    incorporated by reference.)
        
       10.8    --   Agreement and Second Amendment to Credit Agreement dated 
                    March 20, 1994, by and among Allwaste, the financial
                    institutions signatory thereto, and Texas Commerce Bank
                    National Association, a national banking association, as
                    Agent.  (Exhibit 10.8 to the February 10-Q is hereby
                    incorporated by reference.)
        
       10.9    --   Agreement and Third Amendment to Credit Agreement dated 
                    May 31, 1994, by and among Allwaste, the financial
                    institutions signatory thereto, and Texas Commerce Bank
                    National Association, a national banking association, as
                    Agent.  (Exhibit 10.9 to the February 10-Q is hereby
                    incorporated by reference.)
        
       10.10   --   Agreement and Fourth Amendment to Credit Agreement dated
                    October 18, 1994, by and among Allwaste, the financial
                    institutions signatory thereto, and Texas Commerce Bank
                    National Association, a national banking association, as
                    Agent. (Exhibit 10.10 to the February 10-Q is hereby
                    incorporated by reference.)

       10.11   --   Agreement and Fifth Amendment to Credit Agreement dated
                    August 31, 1995, by and among Allwaste, the financial
                    institutions signatory thereto, and Texas Commerce Bank
                    National Association, a national banking association, as
                    Agent. (Exhibit 10.11 to the February 10-Q is hereby
                    incorporated by reference.)

       10.12   --   First Amendment to Employment Agreement dated as of October
                    26, 1995, between Robert M. Chiste and Allwaste.  (Exhibit
                    10.6 to the Allwaste Annual Report on Form 10-K (File No.
                    1-11016) for the fiscal year ended August 31, 1995, filed
                    November 30, 1995 (the "1995 Form 10-K"), is hereby
                    incorporated by reference.)




<PAGE>   23
       10.13   --   Agreement and Sixth Amendment to Credit Agreement dated
                    February 29, 1996, by and among Allwaste, the financial
                    institutions signatory thereto, and Texas Commerce Bank
                    National Association, a national banking association, as
                    Agent.  (Exhibit 10.13 to the Allwaste Quarterly Report on
                    Form 10-Q (File No. 1-11016) for the fiscal quarter ended
                    May 31, 1996 (the "May 10-Q") is hereby incorporated by
                    reference.)

       10.14   --   Agreement and Seventh Amendment to Credit Agreement dated
                    August 1, 1996, by and among Allwaste, the financial
                    institutions signatory thereto, and Texas Commerce Bank
                    National Association, a national banking association, as
                    Agent.  (Exhibit 10.14 to the 1996 10-K is hereby
                    incorporated by reference.)

       10.15   --   First Amendment to Employment Agreement dated November 11,
                    1996, between R. L. Nelson, Jr. and Allwaste. (Exhibit
                    10.15 to the 1996 10-K is hereby incorporated by
                    reference.)

       10.16   --   Second Amendment to Employment Agreement dated October 25,
                    1996, between Robert M. Chiste and Allwaste.  (Exhibit
                    10.16 to the 1996 10-K is hereby incorporated by
                    reference.)

       10.17   --   First Amendment to Employment Agreement dated November 11,
                    1996, between William L. Fiedler and Allwaste.  (Exhibit
                    10.17 to the 1996 10-K is hereby incorporated by
                    reference.)

       10.18   --   Employment Agreement dated November 11, 1996, between David
                    E. Fanta and Allwaste.  (Exhibit 10.18 to the 1996 10-K is
                    hereby incorporated by reference.)

       10.19   --   Employment Agreement dated November 11, 1996, between T.
                    Wayne Wren, Jr. and Allwaste.  (Exhibit 10.19 to the 1996
                    10-K is hereby incorporated by reference.)

       10.20   --   Employment Agreement dated November 11, 1996, between James
                    E. Rief and Allwaste.  (Exhibit 10.20 to the 1996 10-K is
                    hereby incorporated by reference.)

       10.21   --   Employment Agreement dated November 11, 1996, between
                    Michael W. Ramirez and Allwaste.  (Exhibit 10.21 to the
                    1996 10-K is hereby incorporated by reference.)

       10.22   --   Executive Severance Agreement dated November 11, 1996,
                    between R. L. Nelson, Jr. and Allwaste.  (Exhibit 10.22 to
                    the 1996 10-K is hereby incorporated by reference.)

       10.23   --   Executive Severance Agreement dated November 11, 1996,
                    between Robert M. Chiste and Allwaste.  (Exhibit 10.23 to
                    the 1996 10-K is hereby incorporated by reference.)

       10.24   --   Executive Severance Agreement dated November 11, 1996,
                    between David E. Fanta and Allwaste.  (Exhibit 10.24 to the
                    1996 10-K is hereby incorporated by reference.)

       10.25   --   Executive Severance Agreement dated November 11, 1996,
                    between T. Wayne Wren, Jr. and Allwaste.  (Exhibit 10.25 to
                    the 1996 10-K is hereby incorporated by reference.)

       10.26   --   Executive Severance Agreement dated November 11, 1996,
                    between James E. Rief and Allwaste.  (Exhibit 10.26 to the
                    1996 10-K is hereby incorporated by reference.)

       10.27   --   Executive Severance Agreement dated November 11, 1996,
                    between William L. Fiedler and Allwaste.  (Exhibit 10.27 to
                    the 1996 10-K is hereby incorporated by reference.)

       10.28   --   Executive Severance Agreement dated November 11, 1996,
                    between Michael W. Ramirez and Allwaste.  (Exhibit 10.28 to
                    the 1996 10-K is hereby incorporated by reference.)

       10.29   --   1996 Interim Management Bonus Plan.  (Exhibit 10.29 to the
                    1996 10-K is hereby incorporated by reference.)




<PAGE>   24

       10.30   --   Third Amendment to Employment Agreement dated November 11,
                    1996, between Robert M. Chiste and Allwaste.  (Exhibit
                    10.30 to the 1996 10-K is hereby incorporated by
                    reference.)

       10.31   --   Allwaste EVA Incentive Compensation Plan.  (Exhibit 10.31
                    to the 1996 10-K is hereby incorporated by reference.)

       10.32   --   Agreement and Eighth Amendment to Credit Agreement dated
                    December 1, 1996, by and among Allwaste, the financial
                    institutions signatory thereto, and Texas Commerce Bank
                    National Association, a national banking association, as
                    Agent.  (Exhibit 10.32 to the Allwaste Quarterly Report on
                    Form 10-Q for the fiscal quarter ended February 28, 1997
                    (the "February 1997 10-Q" is hereby incorporated by
                    reference.)

       10.33   --   Non-Employee Director Restricted Stock Plan.  (Exhibit
                    10.33 to the February 1997 10-Q is hereby incorporated by
                    reference.)

       10.34   --   Interim Deferred Compensation Plan.  (Exhibit 10.34 to the
                    February 1997 10-Q is hereby incorporated by reference.)

       10.35   --   Agreement and Ninth Amendment to Credit Agreement dated
                    January 10, 1997, by and among Allwaste, the financial
                    institutions signatory thereto, and Texas Commerce Bank
                    National Association, a national banking association, as
                    Agent.  (Filed herewith.)

       10.36   --   Allwaste Deferred Compensation Plan Trust Agreement dated
                    effective as of May 15, 1997.  (Filed herewith).

       10.37   --   Allwaste Deferred Compensation Plan dated effective as of
                    May 15, 1997.  (Filed herewith.)

       10.38   --   Allwaste Supplemental Executive Retirement Plan dated
                    effective as of January 1, 1997.  (Filed herewith.)

       10.39   --   Agreement and Plan of Merger dated March 5, 1997, by and
                    among Philip Environmental Inc. (now known as Philip
                    Services Corp.), Taro Aggregates Ltd., Philip/Atlas Merger
                    Corp. and Allwaste.  (Exhibit 99.2 to the Allwaste Current
                    Report on Form 8-K dated March 6, 1997, filed April 4,
                    1997, is hereby incorporated by reference.)

       10.40   --   First Amendment to the Allwaste EVA Incentive Compensation
                    Plan.  (Filed herewith.)

       10.41   --   Corrective Amendment to the Allwaste, Inc. Amended and
                    Restated 1989 Replacement Non-Qualified Stock Option Plan.
                    (Filed herewith.)

       10.42   --   Amendment and Restatement of Executive Severance Agreement
                    dated March 5, 1997, between Allwaste and Robert M. Chiste.
                    (Filed herewith.)

       10.43   --   Amendment and Restatement of Executive Severance Agreement
                    dated March 5, 1997, between Allwaste and David E. Fanta.
                    (Filed herewith.)

       10.44   --   Amendment and Restatement of Executive Severance Agreement
                    dated March 5, 1997, between Allwaste and William L.
                    Fiedler.  (Filed herewith.)
        
       10.45   --   Amendment and Restatement of Executive Severance Agreement
                    dated March 5, 1997, between Allwaste and R. L. Nelson, Jr.
                    (Filed herewith.)

       10.46   --   Amendment and Restatement of Executive Severance Agreement
                    dated March 5, 1997, between Allwaste and Michael W.
                    Ramirez.  (Filed herewith.)
<PAGE>   25

       10.47   --   Amendment and Restatement of Executive Severance Agreement
                    dated March 5, 1997, between Allwaste and James E. Rief.
                    (Filed herewith.)

       10.48   --   Amendment and Restatement of Executive Severance Agreement
                    dated March 5, 1997, between Allwaste and T. Wayne Wren, Jr.
                    (Filed herewith.)

       27.1    --   Financial Data Schedule.  (Filed herewith.)



