_______________________________________________________________________

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________________________________________

FORM 10-K
(Mark One)

/ X / ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]

For the fiscal year ended September 30, 1995 or

/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period from ________________ to _______________

Commission file number 1-10105

MATLACK SYSTEMS, INC.
(Exact name of registrant as specified in its charter)

DELAWARE 51-0310173
(State of Incorporation) (I.R.S. Employer Identification Number)

ONE ROLLINS PLAZA, WILMINGTON, DELAWARE 19803
(Address of principal executive offices)

Registrant's telephone number including area code (302) 426-2700

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

Title of Class Name of exchange on which
registered
Common Stock, $1 Par Value NEW YORK STOCK EXCHANGE

Securities registered pursuant to Section 12(g) of the Act: NONE

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

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

The aggregate market value of the voting stock held by non-affiliates of
the registrant was $60,936,000 as of October 31, 1995.

The number of shares of registrant's common stock outstanding as of
October 31, 1995 was 8,800,050.

The following documents are incorporated by reference:

Part of this form into which
Document incorporated

Proxy Statement in connection with
Annual Meeting of Shareholders to be
held January 25, 1996 III

PART I

ITEM 1. BUSINESS.

The Registrant, Matlack Systems, Inc., together with its subsidiaries
(herein collectively referred to as the "Company" unless the context
indicates otherwise) is a specialized logistics and transportation company
which provides specialized transportation of bulk commodities in tank
trailers and tank containers to the nation's leading chemical and dry bulk
shippers. In addition to specialized trucking, the Company provides
intermodal transportation services, trailer leasing, dedicated contract
carriage services, international bulk transportation, tank cleaning services
and logistics management services to the chemical industry. The Company
operates approximately 1,250 tractors and 2,700 trailers out of approximately
94 terminals located in 38 states and four Canadian provinces.

(a) General Development of Business

There have been no significant changes in the business of the Company
since September 30, 1994.

(b) Financial Information about Industry Segments

The Company's major operation is the transportation of bulk commodities
in tank trailers. Financial information concerning this business is included
on pages 3 to 5 and 10 through 21 of this 1995 Annual Report on Form 10-K.

The business discussed in this section is that of the Company's major
operating subsidiary Matlack, Inc., the bulk carrier and its subsidiaries and
affiliates, collectively referred to hereinafter as "Matlack".

In terms of revenues, Matlack is one of the largest companies in the
country engaged in highway transportation of bulk commodities primarily in
tank trailers. Matlack is one of the few nationwide interstate tank truck
carriers authorized to transport chemicals and other dry and liquid products
in bulk. Matlack also operates on an intrastate basis in 38 states.

Matlack is subject to regulation by the Interstate Commerce Commission and
various state regulatory agencies. As a common and contract carrier by motor
vehicle, Matlack holds certificates of public convenience and necessity
issued by the regulatory agencies. These certificates define the commodities
which the holder is authorized to transport and the points of origin and
destination for carriers of such commodities. Matlack has terminals in
Toronto and Sarnia, Ontario; Montreal, Quebec; Vancouver, British Columbia
and Leduc, Alberta and it holds operating licenses under which it may
transport various commodities into and out of certain Canadian Provinces via
specific border entry points from the United States. To the best of its
knowledge, Matlack is in compliance with the regulations of the Interstate
Commerce Commission and those of the various state and provincial regulatory
agencies where it operates.

The business of the Company is generally not subject to seasonal
variations, however, highway transportation activities can be adversely
affected depending on the severity of the weather in the various sections of
the country during the winter months. No customer accounts for more than
7.0% of the Company's bulk transportation revenues.

Competition

For the most part, Matlack's competition consists of those bulk carriers
having operating authority in the relevant jurisdictions. Competition is
based primarily on service, rates and convenience. Competition in the bulk
trucking industry formerly was restricted and was based primarily on a
carrier's ability to obtain certificates of public convenience and necessity
to transport defined commodities in specific geographic areas. Since the
passage of the Motor Carrier Act of 1980, many bulk carriers have obtained
authority to serve expanded geographic areas on an interstate basis, which,
together with excess capacity, has resulted in the intensification of price
competition.

To the extent that competition is based on service and convenience, the
number and location of Matlack's terminals, together with its ability to
clean tank trailers places Matlack in a favorable position to increase its
business. Management believes that Matlack's fleet of trailers is one of the
largest and most diversified in the tank truck industry. Matlack's network
of strategically located terminal facilities is, in management's opinion, one
of the largest and the best in the industry.

Matlack's largest competitors in the tank truck industry, based upon a
comparison of gross revenues, are Chemical Leaman Tank Lines, Inc. and DSI
Transports Inc. In addition, there are approximately 190 other recognized
competitors operating in the various regions where Matlack has operating
authority.

The Company believes that its contractual arrangements and business
policies are adequate in securing rate increases to recover rising costs and
expenses to the extent permitted by competitive circumstances, which remain
intense. Unusual increases in fuel costs can generally be offset by fuel
surcharges to customers. Accordingly, while inflation has had an impact on
the Company's operations during the last three fiscal years, competition
within the industry has been a major factor in establishing the rates that
the Company can charge for its services.

Employees

At September 30, 1995, a total of 1,106 persons were employed by the
Company.

ITEM 2. PROPERTIES.

The Company maintains its headquarters in space leased from Rollins
Properties, Inc., a wholly-owned subsidiary of Rollins Truck Leasing Corp.,
at 2200 Concord Pike, Wilmington, Delaware. The Company's principal
properties consist of land and buildings used in its bulk trucking business.
Matlack owns or leases approximately 89 truck terminals in 38 states and five
terminals in four Canadian provinces.

ITEM 3. LEGAL PROCEEDINGS.

There are various claims and legal actions pending against the Company.
In the opinion of management, based on the advice of counsel, it is only
remotely likely that the ultimate resolution of these claims and actions will
be material.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

NONE.

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS.

For the fiscal years ended September 30, 1995 and 1994, the range of
share prices for the Common Stock on the New York Stock Exchange (effective
December 9, 1993) and the American Stock Exchange (prior to December 9, 1993)
is as follows:

1995 1994
Fiscal Quarter High Low High Low
First . . . . . $10 7/8 $9 3/8 $11 $ 9 1/8
Second . . . . . $12 $9 5/8 $10 7/8 $ 9
Third . . . . . $12 1/4 $9 7/8 $11 3/8 $ 9 7/8
Fourth . . . . . $11 $9 1/2 $11 3/4 $10 1/4

No dividends have been paid since the Company became publicly held in
January of 1989.

At September 30, 1995, there were 1,932 holders of record of the Common
Stock.

ITEM 6. SELECTED FINANCIAL DATA.

FIVE YEAR SELECTED FINANCIAL DATA
(Dollars in Thousands, Except Per Share Amounts)

Year Ended September 30, 1995 1994 1993 1992 1991
Revenues $236,257 $217,880 $204,809 $199,488 $199,090
Earnings (loss)
before income
taxes (benefit) $ 11,211 $ 10,516 $ 8,054 $ 4,043(2) $(4,439)
Net earnings (loss) $ 6,601 $ 6,182 $ 4,414(1) $ 2,153(3) $(2,826)
Earnings (loss)
per share $ .74 $ .69 $ .50(1) $ .25(3) $ (.33)

At September 30,
Total assets $131,974 $122,526 $105,363 $101,091 $106,994
Long-term indebtedness $ 32,970 $ 24,800 $ 20,360 $ 22,418 $ 35,709
Shareholders' equity $ 57,532 $ 50,726 $ 44,297 $ 39,763 $ 37,497

(1) Reduced by additional deferred income tax provision of $169 ($.02 per
share) to reflect the increase in the federal
income tax rate from 34% to 35%.
(2) Before charge of $328 to reflect a change in the method of revenue
recognition.
(3) Reduced by $190 ($.02 per share) representing the cumulative after-tax
effect to September 30, 1991 of a change
in the method of revenue recognition as of October 1, 1991.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.

Liquidity and Capital Resources

The Company's operations require a continuous investment in equipment and
facilities. Net capital expenditures for equipment and facilities were $25.7
million in 1995, $20.0 in 1994 and $10.5 million in 1993. Capital
expenditures are funded principally by the cash flows from operations which
were $14.6 million in 1995, $16.4 million in 1994 and $11.2 million in 1993.
The increased capital spending in 1994 and 1995 required additional funding
provided by equipment term loans from various financial institutions. Based
on its relationship with current lenders, the Company expects to continue to
be able to obtain required financing at market rates and under satisfactory
terms and conditions.

At September 30, 1995, the Company had commitments of $.2 million to
purchase transportation equipment. As required, additional funds are
available to the Company from its unsecured revolving credit facility and
from other financial institutions who have expressed an interest in providing
equipment financing. The revolving credit agreement with two banks provides
for an aggregate commitment of $30.0 million to meet equipment financing
needs and letter of credit requirements. The agreement expires on December
31, 1999, but may be renewed on a year-to-year basis thereafter upon
agreement of the parties thereto. At September 30, 1995, a total of $7.6
million was available under the revolving credit facility.

In the normal course of its business, Matlack is subject to numerous
state and federal environmental laws and regulations and also is exposed to
the cost and risk of transporting and handling materials and wastes
characterized as hazardous by various regulatory agencies. Matlack has
received notices from the United States Environmental Protection Agency
("EPA") and others indicating that it is a "potentially responsible party"
with respect to the cleanup of hazardous wastes at several waste disposal
sites. Matlack has been named as a defendant in several lawsuits brought
under the Comprehensive Environmental Response, Compensation and Liability
Act ("CERCLA") for recovery of costs associated with the cleanup of waste
disposal sites. In addition, Matlack has responded to various governmental
requests, principally those of the EPA pursuant to CERCLA, for information
with respect to possible disposition of waste materials attributable to it at
various waste disposal sites. Based on information currently available, the
Company's management believes its ultimate liability at these sites will not
have a material adverse effect upon the Company.

Results of Operations
The Company's principal line of business is the transportation of liquid
and dry material by tank trucks. Competition in this industry remained
intense during the past three years due to the excess capacity of the
carriers.

The Company believes that its contractual arrangements and business
policies generally are adequate in securing rate increases to recover rising
fuel and other costs and expenses to the extent permitted by competitive
circumstances, which remain intense.

Fiscal Year 1995 vs. 1994

Revenues for 1995 increased by $18.4 million (8.4%) to $236.3 million
from the $217.9 million reported in 1994. Total revenue miles increased by
7.9% in 1995 while the number of loads carried increased by 4.7% over the
prior year. In addition to the bulk transportation revenue growth, the
Company noted strong increases in tank cleaning and other service revenues.

Operating expenses increased by $13.5 million (7.5%) mainly due to costs
associated with the increased revenues and fleet size. Operating expenses
were 81.7% of revenues in 1995 and 82.5% of revenues in 1994.

Depreciation expense increased by $1.8 million (21.7%) principally due
to the increase in capital expenditures associated with the Company's tractor
replacement program, which was completed in 1995.

Selling and administrative expenses increased by $.9 million (5.1%)
reflecting the increased level of business. These expenses were 7.9% and
8.2% of revenue in 1995 and 1994, respectively.

Interest expense increased by $1.1 million (52.4%) due to the higher
borrowing levels associated with the Company's increased level of capital
spending in 1995.

The effective income tax rates for 1995 and 1994 were 41.1% and 41.2%,
respectively.

The Company's net earnings increased by 6.5% to $6.6 million in 1995
compared with $6.2 million in 1994. The improvement in net earnings resulted
mainly from the increased revenues offset in large part by higher
depreciation and interest expense.

Fiscal Year 1994 vs. 1993

Revenues for 1994 increased by $13.1 million (6.4%) to $217.9 million
from the $204.8 million reported in 1993. Revenue miles increased by 5.6%
while the number of loads carried was up slightly. The 1994 revenue per load
increased by 3.8% while revenue per mile in 1994 was comparable to 1993.

Operating expenses increased by $11.2 million due in large part to the
increase in revenues. Operating expenses were 82.5% of revenues in 1994 and
82.2% of revenues in 1993.

Depreciation expenses decreased by $1.2 million (11.9%) mainly due to the
significant portion of the Company's bulk transportation equipment which has
become fully depreciated.

Selling and administrative expenses increased by $.8 million (4.8%) and
were 8.2% and 8.3% of revenue in 1994 and 1993, respectively. The increase
was mainly due to higher payroll and related expenses.

Interest expense decreased by $.1 million (4.4%) due to the refinancing
of higher interest rate debt offset in part by higher borrowing levels.

The effective income tax rates were 41.2% and 45.2% in 1994 and 1993,
respectively. The 1993 effective tax rate was affected by the increase in
the federal income tax rate from 34% to 35% which required an adjustment of
deferred taxes.

The Company's net earnings increased by $1.8 million (40.0%) to $6.2
million in 1994 compared with $4.4 million in 1993. The earnings improvement
resulted from the increased revenues and the Company's continued successful
efforts at cost containment.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The consolidated financial statements of the Company, the Independent
Auditors' Report and the financial statement schedules included in this
report are shown on the Index to the Consolidated Financial Statements and
Schedules on page 10.

ITEM 9. DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

NONE.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

Except as presented below, the information called for by this Item 10 is
incorporated by reference from the Company's Proxy Statement to be filed
pursuant to Regulation 14A for the Annual Meeting of Shareholders to be held
on January 25, 1996.

Executive Officers of the Registrant. As of October 31, 1995, the
Executive Officers of the registrant were:

Name Position Age Term of Office

Patrick J. Bagley Vice President-Finance and 48 7/88 to date
Treasurer

Michael B. Kinnard Vice President-General Counsel 38 6/94 to date
and Secretary

John W. Rollins, Jr. Chairman of the Board 53 7/88 to date

G. J. Trippitelli President and Chief Executive 52 7/88 to date
Officer

Eugene C. Bonacci Vice President-Operations 55 10/92 to date
Matlack, Inc.

The Company's Executive Officers are elected for the ensuing year and
until their successors are elected.

ITEM 11. EXECUTIVE COMPENSATION.

The information called for by this Item 11 is incorporated by reference
from the Company's Proxy Statement to be filed pursuant to Regulation 14A for
the Annual Meeting of Shareholders to be held on January 25, 1996.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.

The information called for by this Item 12 is incorporated by reference
from the Company's Proxy Statement to be filed pursuant to Regulation 14A for
the Annual Meeting of Shareholders to be held on January 25, 1996.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

During the year ended September 30, 1995, the following officers and/or
directors of the Company were also officers and/or directors of Rollins
Environmental Services, Inc.; Patrick J. Bagley, Michael B. Kinnard, William
B. Philipbar, Jr., John W. Rollins, John W. Rollins, Jr. and Henry B. Tippie.
The following officers and/or directors of the Company were also officers
and/or directors of Rollins Truck Leasing Corp.; Patrick J. Bagley, Michael
B. Kinnard, William B. Philipbar, Jr., John W. Rollins, John W. Rollins, Jr.
and Henry B. Tippie. John W. Rollins owns directly and of record 6.1% and
10.9% of the outstanding shares of Common Stock of Rollins Environmental
Services, Inc. and Rollins Truck Leasing Corp., respectively at October 31,
1995. The description of transactions between the Company and Rollins
Environmental Services, Inc. and between the Company and Rollins Truck
Leasing Corp. appears under the caption "Transactions with Related Parties"
on page 20 of the Company's 1995 Annual Report on Form 10-K.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

(a) (1) Financial Statements - See accompanying Index to Consolidated
Financial Statements and Schedules on page 10.

(2) Financial Statement Schedules - See accompanying Index to
Consolidated Financial Statements and Schedules on page 10.

(3) Exhibits:
(3) Articles of Incorporation and By-Laws of Matlack Systems,
Inc. as filed with Registration Statement No. 33-23524 dated
August 5, 1988 are incorporated herein by reference.

(4) (a) Equipment Financing Agreement dated August 1, 1988 see
Exhibit 10(a).

(b) Rights Agreement dated as of June 14, 1989 as filed as an
Exhibit to Registration Statement on Form 8-A filed by
Registrant on June 15, 1989 is incorporated herein by
reference.

(10) (a) Equipment Financing Agreement dated August 1, 1988 as filed
with Registration Statement No. 33-23524 dated August 5,
1988 is incorporated herein by reference.

(b) First Amendment dated April 13, 1990 to the Equipment
Financing Agreement dated August 1, 1988.

(d) Matlack Systems, Inc. 1988 Stock Option Plan as filed with
Registration Statement No. 33-23524 dated August 5, 1988 is
incorporated herein by reference.

(21) Matlack Systems, Inc. Subsidiaries at September 30, 1995.

(27) Matlack Systems, Inc. Financial Data Schedule at September
30, 1995.

(b) Reports on Form 8-K.

No reports on Form 8-K were filed by Matlack Systems, Inc. during the
last quarter of the period covered by this report.

SIGNATURES

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

DATED: December 4, 1995 Matlack Systems, Inc.
(Registrant)

BY: /s/ G. J. Trippitelli
G. J. Trippitelli
President and Chief Executive Officer
and Director

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated:

/s/ Patrick J. Bagley Director, December 4, 1995
Patrick J. Bagley Vice President-Finance
and Treasurer
Chief Financial Officer
Chief Accounting Officer

/s/ John W. Rollins, Jr. Director, Chairman of the December 4, 1995
John W. Rollins, Jr. Board

/s/ John W. Rollins Director December 4, 1995
John W. Rollins

/s/ Henry B. Tippie Chairman of the Executive December 4, 1995
Henry B. Tippie Committee and Director

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES

(1) Consolidated
Page(s)
Independent Auditors' Report on Financial Statements and
Financial Statement Schedules 11

Consolidated Statement of Earnings for the years ended
September 30, 1995, 1994 and 1993 12

Consolidated Balance Sheet at September 30, 1995 and 1994 13

Consolidated Statement of Cash Flows for the years ended
September 30, 1995, 1994 and 1993 14

Notes to the Consolidated Financial Statements 15 to 21

(2) Financial Statement Schedules

Matlack Systems, Inc.
Schedule I - Condensed Financial Information

Balance Sheet at September 30, 1995 and 1994 22

Statement of Earnings for the years ended
September 30, 1995, 1994 and 1993 23

Statement of Cash Flows for the years ended
September 30, 1995, 1994 and 1993 24

Note to the Financial Statements 25

Matlack Systems, Inc. and Subsidiaries Consolidated

Schedule II - Valuation and Qualifying Accounts for the
years ended September 30, 1995, 1994 and 1993 26

Any financial statement schedules otherwise required have been omitted
because they are not applicable or the required information is shown in the
financial statements or notes thereto.

Independent Auditors' Report

The Shareholders and Board of Directors
Matlack Systems, Inc.:

We have audited the consolidated financial statements of Matlack Systems,
Inc. and subsidiaries as listed in the accompanying index. In connection
with our audits of the consolidated financial statements, we also have
audited the financial statement schedules as listed in the accompanying
index. These consolidated financial statements and financial statement
schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements and financial statement schedules based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Matlack
Systems, Inc. and subsidiaries as of September 30, 1995 and 1994, and the
results of their operations and their cash flows for each of the years in the
three-year period ended September 30, 1995, in conformity with generally
accepted accounting principles. Also in our opinion, the related financial
statement schedules, when considered in relation to the basic consolidated
financial statements taken as a whole, present fairly, in all material
respects, the information set forth therein.

KPMG Peat Marwick LLP

Philadelphia, Pennsylvania
October 25, 1995

CONSOLIDATED STATEMENT OF EARNINGS

Year Ended September 30,
1995 1994 1993
Revenues $236,257,000 $217,880,000 $204,809,000

Expenses:
Operating 193,131,000 179,648,000 168,400,000
Depreciation 10,079,000 8,261,000 9,517,000
Selling and administrative 18,708,000 17,837,000 17,015,000
Other (income) (110,000) (433,000) (323,000)
221,808,000 205,313,000 194,609,000

Earnings before interest
expense and income taxes 14,449,000 12,567,000 10,200,000
Interest expense 3,238,000 2,051,000 2,146,000

Earnings before income taxes 11,211,000 10,516,000 8,054,000
Income taxes 4,610,000 4,334,000 3,640,000
Net earnings $ 6,601,000 $ 6,182,000 $ 4,414,000

Earnings per share $ .74 $ .69 $ .50

Common shares and equivalents
outstanding 8,907,000 8,899,000 8,822,000

The Notes to the Consolidated Financial Statements are an integral part of
these statements.
CONSOLIDATED BALANCE SHEET

September 30,
1995 1994
ASSETS

Current assets
Cash $ 2,845,000 $ 5,039,000
Accounts receivable, net of allowance
for doubtful accounts: 1995-$391,000;
1994-$390,000 24,688,000 27,385,000
Inventory of tires, parts and supplies 6,307,000 7,267,000
Other current assets 3,071,000 3,073,000
Deferred income taxes 1,586,000 1,852,000
Total current assets 38,497,000 44,616,000

Property and equipment, at cost, net of
accumulated depreciation 93,454,000 77,771,000
Other assets 23,000 139,000
Total assets $131,974,000 $122,526,000

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities
Accounts payable $ 10,603,000 $ 15,748,000
Accrued liabilities 9,146,000 10,971,000
Income taxes payable 53,000 99,000
Current maturities of equipment
financing obligations and
long-term debt 6,169,000 5,656,000
Total current liabilities 25,971,000 32,474,000

Equipment financing obligations 31,065,000 22,103,000
Long-term debt 1,905,000 2,697,000
Insurance reserves 1,795,000 2,486,000
Other liabilities 2,157,000 2,216,000
Deferred income taxes 11,549,000 9,824,000

Commitments and contingencies (see Notes
to the Consolidated Financial Statements)

Shareholders' equity:
Common stock $1.00 par value
Outstanding: 1995-8,800,050 shares;
1994-8,756,326 shares 8,800,000 8,757,000
Capital in excess of par value 10,894,000 10,732,000
Retained earnings 37,838,000 31,237,000
Total shareholders' equity 57,532,000 50,726,000
Total liabilities and shareholders'
equity $131,974,000 $122,526,000

The Notes to the Consolidated Financial Statements are an integral part of
these statements.
CONSOLIDATED STATEMENT OF CASH FLOWS

Year Ended September 30,
1995 1994 1993

Cash flows from operating activities:
Net earnings $ 6,601,000 $ 6,182,000 $ 4,414,000
Reconciliation of net earnings
to net cash flows from
operating activities:
Depreciation 10,079,000 8,386,000 9,517,000
Net gain on sale of equipment (110,000) (433,000) (323,000)
Changes in assets and
liabilities:
Accounts receivable 2,697,000 (3,323,000) (2,994,000)
Inventories and other assets 849,000 (616,000) (588,000)
Accounts payable and accrued
liabilities (6,970,000) 6,362,000 829,000
Current and deferred
income taxes 2,174,000 279,000 575,000
Other, net (750,000) (406,000) (275,000)

Net cash provided by operating
activities 14,570,000 16,431,000 11,155,000

Cash flows from investing
activities:
Purchase of property and
equipment (28,474,000) (22,561,000) (11,499,000)
Proceeds from the sale of
equipment 2,822,000 2,573,000 973,000

Net cash used in investing
activities 25,652,000 (19,988,000) (10,526,000)

Cash flows from financing activities:
Proceeds of equipment financing
obligations 41,002,000 25,601,000 16,183,000
Repayment of equipment
financing obligations (31,526,000) (19,392,000) (18,577,000)
Proceeds of long-term debt - 1,000,000 1,741,000
Repayment of long-term debt (793,000) (2,893,000) (337,000)
Exercise of stock options 205,000 263,000 120,000
Other - (16,000) -
Net cash provided by (used in)
financing activities 8,888,000 4,563,000 (870,000)

Net (decrease) increase in cash (2,194,000) 1,006,000 (241,000)
Cash beginning of period 5,039,000 4,033,000 4,274,000
Cash end of period $ 2,845,000 $ 5,039,000 $ 4,033,000

Supplemental information:
Interest paid $ 3,233,000 $ 2,043,000 $ 2,257,000
Income taxes paid $ 2,436,000 $ 4,055,000 $ 3,065,000

The Notes to the Consolidated Financial Statements are an integral part of
these statements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Accounting Policies

The consolidated financial statements include the accounts of all
subsidiaries with appropriate elimination of intercompany transactions and
balances.

The Company recognizes revenue when shipments are delivered. Expenses
are recognized concurrently with revenues.

Inventories of transportation equipment parts and supplies are valued at
the lower of first-in, first-out cost or market. Tires on vehicles,
including new or recapped replacement tires, are valued at cost and are
written off over the expected aggregate useful life which approximates two to
three years.

Property and equipment are recorded at cost. Depreciation is provided
on a straight-line, specific item basis net of salvage or residual values.
The cost and related accumulated depreciation of property and equipment sold
or retired are eliminated from the property accounts, and the resulting gain
or loss is reflected in the statement of earnings. Repairs and maintenance
are expensed as incurred. Improvements which extend the original life of the
assets are capitalized and depreciated over the remaining lives of the
assets.

The Company retains a specific portion of insurable risks with regard to
public liability and workers' compensation claims. Retention levels are
currently $500,000. Reserves are established for claims incurred plus an
estimate for claims incurred but not reported. Reserve requirements are
evaluated and established utilizing historical trends, the Company's
experience, claim severity and other factors. Claims estimated to be paid
within one year have been classified in accrued liabilities with the balance
reflected as non-current insurance reserves.

Earnings per common share are computed assuming the conversion of all
potentially dilutive securities, namely options to purchase shares of the
Company's stock.

Property and Equipment

The Company's property and equipment accounts are as follows:

Useful
September 30, 1995 1994 Lives
Land $ 13,576,000 $ 13,264,000
Transportation equipment 136,261,000 144,850,000 4 to 12 years
Transportation service facilities 58,968,000 51,139,000 5 to 40 years
Less accumulated depreciation (115,351,000) (131,482,000)
$ 93,454,000 $ 77,771,000

The Company had commitments for the purchase of transportation equipment
of $194,000 at September 30, 1995.

Indebtedness

Equipment financing obligations are as follows:

September 30,
1995 1994
Revolving credit agreement -
$30,000,000 line $14,750,000 $ 6,000,000

Note payable to Rollins Truck Leasing Corp. - 6,000,000

Other equipment financing obligations due
banks and other financial institutions
with equipment pledged as security at
interest rates ranging from 6.5% to 8.0%,
payable in installments to 2003 21,692,000 14,967,000

Less amounts due within one year (5,377,000) (4,864,000)
$31,065,000 $22,103,000

The revolving credit agreement is unsecured but, at the option of the
banks, amounts outstanding under the agreement may be secured with unpledged
equipment and accounts receivable. During the fiscal year, interest rates on
borrowings under the agreement ranged from 6.7% to 8.2% and averaged 7.9% at
September 30, 1995. The agreement requires the maintenance of certain
financial ratios, restricts the payment of dividends and regulates payments
to affiliated companies. The credit agreement expires on December 31, 1999
but may be renewed on a year to year basis thereafter upon agreement of the
parties thereto. Termination of the agreement would result in the repayment
of the outstanding loan balance over a period of 60 months in equal monthly
installments. Otherwise, no repayments are required unless the financing
value of the equipment and accounts receivable falls below the outstanding
principal balance of the loan.

The note payable to Rollins Truck Leasing Corp. was issued in connection
with the public sale by that company of Collateral Trust Debentures. In
March of 1995, the Company repaid the $6,000,000 note payable to Rollins
Truck Leasing Corp.

Long-term debt includes real estate mortgage obligations at interest
rates ranging from 6.0% to 8.0% which are payable in installments over
various periods through the year 2000. Land and buildings with a carrying
value of $6,706,000 at September 30, 1995 are pledged as collateral.

The aggregate amounts of maturities for all indebtedness during the next
five fiscal years are as follows: 1996-$6,169,000; 1997-$6,218,000; 1998-
$5,154,000; 1999-$4,323,000 and 2000-$1,242,000.

Accrued Liabilities

Accrued liabilities are as follows:

September 30,
1995 1994

Employee compensation $ 3,851,000 $ 4,470,000
Insurance reserves 2,373,000 2,921,000
Taxes other than income 1,206,000 1,491,000
Other 1,716,000 2,089,000
$ 9,146,000 $10,971,000

Shareholders' Equity

Changes in the components of shareholders' equity are as follows:

$1 Par Value Capital in Total
Common Excess of Retained Shareholders'
Stock Par Value Earnings Equity

Balance at September 30, 1992 $ 5,751,000 $13,372,000 $20,640,000 $39,763,000
Net earnings 4,414,000 4,414,000
Exercise of stock options 28,000 91,000 1,000 120,000
Balance at September 30, 1993 5,779,000 13,463,000 25,055,000 44,297,000
Net earnings 6,182,000 6,182,000
Three-for-two common stock split 2,916,000 (2,932,000) (16,000)
Exercise of stock options 62,000 201,000 263,000
Balance at September 30, 1994 8,757,000 10,732,000 31,237,000 50,726,000
Net earnings 6,601,000 6,601,000
Exercise of stock options 43,000 162,000 205,000
Balance at September 30, 1995 $8,800,000 $10,894,000 $37,838,000 $57,532,000

The Company is authorized to issue 24,000,000 shares of $1 Par Value
Common Stock and 1,000,000 shares of $1 Par Value Preferred Stock. The terms
and conditions of each issue of preferred shares will be determined by the
Board of Directors. No preferred shares have been issued.

Each share of common stock outstanding includes one common stock purchase
right (a "Right") which is non-detachable and non-exercisable until certain
defined events occur, including certain tender offers or the acquisition by
a person or group of affiliated or associated persons of 20% of the Company's
common stock. Upon the occurrence of certain defined events, the Right
entitles the registered holder to purchase one share of common stock of the
Company for $40 and may be modified to permit certain holders to purchase
common stock of the Company or common stock of an acquiring company at a 50%
discount. The Right expires on June 30, 1999 unless earlier redeemed by the
Company at a price of $.0067 per Right as permitted under certain conditions.

Under the terms of the revolving credit agreement, the Company's major
subsidiary may not pay dividends or make any other distribution to the
Company in an amount which exceeds 25% of its aggregate net earnings after
September 30, 1988. Net assets of this subsidiary not restricted under the
agreement totaled $3,524,000 at September 30, 1995.

Stock Option Plan

In July 1988, the Company adopted a stock option plan under which options to purchase up to a total
of 750,000 common shares may be granted to key salaried employees at not less than 100% of the fair
market value on the date of grant.

Option activity is summarized as follows:
Year Ended September 30,
1995 1994 1993

Number of options:
Outstanding at beginning of year 424,128 505,969 281,715
Granted 124,900 20,115 280,800
Exercised (43,724) (87,473) (42,746)
Expired or canceled (14,286) (14,483) (13,800)
Outstanding at September 30 491,018 424,128 505,969
At September 30:
Options available for grant 44,554 155,168 160,800
Options exercisable 136,265 92,610 87,588

Per share prices:
Options granted $9.50 to $ 9.75 $9.25 to $11.33 $8.92
Options exercised $2.42 to $ 9.00 $2.42 to $ 8.92 $2.42 to $3.00
Options outstanding at September 30 $2.42 to $11.33 $2.42 to $11.33 $2.42 to $8.92

Lease Commitments

The Company leases certain of its transportation service and
administrative facilities, office space and transportation equipment. These
leases are classified as operating leases and expire on various dates during
the next eight years. Minimum future payments required under operating
leases having non-cancelable terms in excess of one year as of September 30
are considered in the lease commitments.

Total rent expense incurred under operating leases for the fiscal years
ended September 30, 1995, 1994 and 1993 amounted to $13,732,000, $6,672,000
and $5,325,000, respectively.

Minimum future payments are as follows:

Year Ending September 30,
1996 $10,058,000
1997 9,192,000
1998 6,712,000
1999 4,217,000
2000 1,494,000
Later years 967,000
Total minimum payments required $32,640,000

Income Taxes

The tax provisions for the three years ended September 30, 1995 are
comprised as follows:

Year Ended September 30,
1995 1994 1993
Current: Federal $2,270,000 $2,699,000 $1,868,000
State 556,000 739,000 912,000
Deferred: Federal 1,469,000 759,000 671,000
State 315,000 137,000 20,000
Rate change - - 169,000
Total income taxes $4,610,000 $4,334,000 $3,640,000

A reconciliation of the tax provisions for the three years ended
September 30, 1995 with amounts calculated by applying the statutory federal
income tax rate for those years to earnings before income taxes is as
follows:
Year Ended September 30,
1995 1994 1993
Federal tax at statutory rate $3,924,000 $3,580,000 $2,738,000
State taxes 567,000 577,000 615,000
Rate change - - 169,000
Other 119,000 177,000 118,000
Total income taxes $4,610,000 $4,334,000 $3,640,000

The tax effect of temporary differences which comprise the current and
non-current deferred income tax amounts shown on the balance sheet are as
follows:
September 30,
1995 1994
Depreciation $11,590,000 $10,079,000
Expenses deductible when paid (1,815,000) (2,143,000)
Other 188,000 36,000
Deferred income taxes, net $ 9,963,000 $ 7,972,000

Pension Plans

The Company maintains a noncontributory pension plan for eligible
employees not covered by pension plans under collective bargaining
agreements. Pension costs for this plan are funded in accordance with the
provisions of the Internal Revenue Code. The Company also maintains a
nonqualified, non-contributory defined benefit pension plan for certain
employees to restore pension benefits reduced by federal income tax
regulations. The cost associated with the plan is determined using the same
actuarial methods and assumptions as those used for the Company's qualified
pension plan.

The components of net periodic pension cost are as follows:
Year Ended September 30,
1995 1994 1993
Service cost $ 510,000 $ 496,000 $ 412,000
Interest cost 591,000 520,000 445,000
Return on plan assets (1,309,000) (7,000) (816,000)
Net amortization and deferral 772,000 (551,000) 302,000
Net periodic pension cost $ 564,000 $ 458,000 $ 343,000

The following table sets forth the plan's funded status and the amount
recognized in the Company's balance sheet for the plans:
September 30,
1995 1994
Actuarial present value of accumulated
benefit obligation:
Vested $6,581,000 $5,611,000
Non-vested 251,000 262,000
$6,832,000 $5,873,000

Projected benefit obligation $8,408,000 $7,492,000
Plan assets at market value 7,627,000 5,860,000
Projected benefit obligation in
excess of plan assets 781,000 1,632,000
Unrecognized gain 1,110,000 329,000
Unrecognized prior service cost (113,000) (128,000)
Unrecognized overfunding at adoption 81,000 97,000
Accrued pension liability $1,859,000 $1,930,000

The discount rate and the rate of assumed compensation increase for all
three years were 8.0% and 5.0%, respectively. The expected long-term rate of
return on assets was 9.0% for 1995 and 9.5% for 1994 and 1993.

At September 30, 1995, the assets of the pension plans were invested 76%
in equity securities and 24% in fixed income securities.

Effective October 1, 1994, the Company established a defined contribution
401(k) plan which permits participation by substantially all employees not
represented under a collective bargaining agreement.

The Company expensed payments to multi-employer pension plans required
by collective bargaining agreements of $3,082,000 in 1995, $2,731,000 in 1994
and $2,639,000 in 1993. The actuarial present value of accumulated plan
benefits and net assets available for benefits to employees under these plans
are not available.

Transactions with Related Parties

Certain directors and officers of the Company are also directors and
officers of Rollins Environmental Services, Inc. and of Rollins Truck Leasing
Corp.

The Company provided transportation services to Rollins Environmental
Services, Inc. and realized revenues therefrom of $13,265,000 in 1995,
$3,175,000 in 1994 and $1,714,000 in 1993.

The Company purchased materials, administrative services, insurance and
rented office space from Rollins Truck Leasing Corp., its subsidiaries and
affiliates. The aggregate cost of these materials, services and rents, which
have been included in operating expenses or selling and administrative
expenses, as appropriate, in the Consolidated Statement of Earnings, was
$3,286,000 in 1995, $2,949,000 in 1994 and $3,077,000 in 1993.

In connection with the note payable to Rollins Truck Leasing Corp., the
Company incurred interest expense which was paid to Rollins Truck Leasing
Corp. of $272,000 in 1995, $593,000 in 1994 and $1,023,000 in 1993.

An officer of the Company is the trustee of an employee benefits trust
which provides certain insurance and health care benefits to employees of the
Company. Contributions to the trust, which were charged to operating or
selling and administrative expenses, as appropriate, were $2,567,000 in 1995,
$2,529,000 in 1994 and $2,747,000 in 1993.

In the opinion of management of the Company, the foregoing transactions
were effected at rates which approximate those which the Company would have
realized or incurred had such transactions been effected with independent
third parties.

Commitments and Contingencies

In the normal course of its business, Matlack is subject to numerous
state and federal environmental laws and regulations and is also exposed to
the cost and risk of transporting and handling materials and wastes
characterized as hazardous by various regulatory agencies. Matlack has
received notices from the United States Environmental Protection Agency
("EPA") and others indicating that it is a "potentially responsible party"
with respect to the clean-up of hazardous wastes at several waste disposal
sites. Matlack has been named as a defendant in several lawsuits brought
under the Comprehensive Environmental Response, Compensation and Liability
Act ("CERCLA") for recovery of costs associated with the clean-up of waste
disposal sites. In addition, Matlack has responded to various governmental
requests, principally those of the EPA pursuant to CERCLA, for information
with respect to possible disposition of waste materials attributable to it at
various waste disposal sites.

Where losses are probable, provision has been made based upon available
information with respect to the cost of all such claims. In determining the
Company's liability with respect to such claims, consideration is given to
the total cost to remediate the site, the Company's contribution of waste at
the site, the participation of other responsible parties and all other
relevant circumstances of the claim. All claims and litigations are reviewed
to determine the likelihood that their ultimate resolution would have a
material adverse effect upon the Company.

Matlack is involved in ordinary routine litigation incidental to the
operation of its business. In the opinion of management, based on the advice
of counsel, it is only remotely likely that the ultimate resolution of these
claims and actions will be material.

Quarterly Results (Unaudited)

December March June September
1995 31 31 30 30
Revenues $57,085,000 $60,750,000 $61,301,000 $57,121,000
Gross profit $ 7,078,000 $ 8,252,000 $ 9,125,000 $ 8,592,000
Earnings before
income taxes $ 1,734,000 $ 2,739,000 $ 3,789,000 $ 2,949,000
Net earnings $ 1,014,000 $ 1,602,000 $ 2,238,000 $ 1,747,000
Earnings per share $ .11 $ .18 $ .25 $ .20
1994
Revenues $49,900,000 $54,679,000 $56,129,000 $57,172,000
Gross profit $ 5,563,000 $ 7,079,000 $ 8,518,000 $ 8,811,000
Earnings before
income taxes $ 1,004,000 $ 2,223,000 $ 3,513,000 $ 3,776,000
Net earnings $ 583,000 $ 1,289,000 $ 2,071,000 $ 2,239,000
Earnings per share $ .07 $ .14 $ .23 $ .25

PAGE

SCHEDULE I - Condensed Financial Information

MATLACK SYSTEMS, INC.
BALANCE SHEET
($000 Omitted)

Assets September 30,
1995 1994
Current Assets
Cash $ 18 $ 608
Other current assets 111 32
129 640

Investments in subsidiaries, at equity* 59,108 50,385
Other assets 35 -
$59,272 $51,025
Liabilities and Shareholders' Equity

Current Liabilities
Accounts payable $ 14 $ 14
Accrued liabilities 130 83
Income taxes payable 135 163
279 260

Advance from subsidiary* 1,257 -
Other liabilities - 15
Deferred federal income taxes 204 24

Shareholders' equity
Common shares $1 Par Value, 24,000,000 shares
authorized; issued and outstanding:
1995: 8,800,050; 1994: 8,756,326 8,800 8,757
Capital in excess of par values 10,894 10,732
Retained earnings 37,838 31,237
57,532 50,726
$59,272 $51,025

* Eliminated in consolidation.

The Note to the Financial Statements is an integral part of these statements.

SCHEDULE I - Condensed Financial Information
(continued)

MATLACK SYSTEMS, INC.
STATEMENT OF EARNINGS
($000 Omitted)

Year Ended September 30,
1995 1994 1993

Revenues:
Dividends from subsidiaries $ 250 $ 900 $ 200

Administrative expenses 110 315 137

Earnings before income taxes 140 585 63

Income tax (benefit) 84 (129) (26)

Net earnings of Matlack Systems, Inc. 56 714 89

Equity in undistributed net earnings
of subsidiaries 6,545 5,468 4,325

Net earnings $6,601 $6,182 $4,414

The Note to the Financial Statements is an integral part of these statements.

SCHEDULE I - Condensed Financial Information
(continued)

MATLACK SYSTEMS, INC.
STATEMENT OF CASH FLOWS
($000 Omitted)

Year Ended September 30,

1995 1994 1993

Cash flows from operating activities:
Earnings prior to equity in
subsidiaries' undistributed earnings $ 56 $ 714 $ 89

Reconciliation of earnings to net
cash flows from operating activities:
Changes in assets and liabilities:
Accounts receivable - 63 (63)
Accounts payable and accrued
liabilities 47 (10) 94
Current and deferred income taxes 152 135 (55)
Other, net (129) 1 3
Net cash flows from operating activities 126 903 68

Cash flows from investing activities - - -

Cash flows from financing activities:
Proceeds of stock options exercised 205 263 120
Capital contribution to subsidiary (2,178) (700) (200)
Advance from subsidiary 1,257 - -
Other - (16) -
Net cash flows used in financing
activities (716) (453) (80)

Net (decrease) increase in cash (590) 450 (12)

Cash beginning of period 608 158 170

Cash end of period $ 18 $ 608 $ 158

Supplemental information:

Interest paid $ - $ - $ -
Income taxes paid $1,743 $3,249 $2,874

The Note to the Financial Statements is an integral part of these statements.

SCHEDULE I - Condensed Financial Information
(continued)

MATLACK SYSTEMS, INC.
Note to the Financial Statements

Accounting Policies

The accounting policies of the Registrant and its subsidiaries are set
forth on page 15 of this 1995 Annual Report on Form 10-K.

The Company's principal source of earnings is dividends paid by its
subsidiaries. Certain loan agreements restrict payments to the Company by
its subsidiaries. Net assets of subsidiaries not restricted under such loan
agreements totaled $6,074,000 at September 30, 1995. The Company also
realizes cash receipts by assessing subsidiaries for federal taxes on income
and expends cash in payment of such taxes on a consolidated basis. Tax
assessments are based on the amount of federal income taxes which would be
payable (recoverable) by each subsidiary company based on its current year's
earnings (loss) reduced by that subsidiary's applicable portion of any
consolidated credits utilized currently in the consolidated federal income
tax return.

MATLACK SYSTEMS, INC. AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
($000 OMITTED)

COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
Additions
Balance at Charged to Charged Balance at
Beginning Costs and to Other End of
Description of Period Expenses Accounts Deductions Period

Year Ended
September 30,

1995: Allowance for doubtful accounts $390 $129 $146(1) $274(2) $391

1994: Allowance for doubtful accounts $381 $194 $196(1) $381(2) $390

1993: Allowance for doubtful accounts $ 362 $91 $265(1) $337(2) $381

(1) Recoveries.
(2) Bad debt write-offs.

Matlack Systems, Inc.

Exhibits to Form 10-K

For Fiscal Year Ended September 30, 1995

Index to Exhibits Page Nos.

Exhibit 10b First Amendment dated April 13, 1990 28
to the Equipment Financing Agreement
dated August 1, 1988

Exhibit 10c Second Amendment dated June 30, 1994 35
to the Equipment Financing Agreement
dated August 1, 1988

Exhibit 21 Matlack Systems, Inc. 44
Subsidiaries at September 30, 1995

Exhibit 27 Matlack Systems, Inc. 45
Financial Data Schedule at
September 30, 1995

Exhibit 21

Matlack Systems, Inc.
Subsidiaries at September 30, 1995

Jurisdiction of
Name Incorporation

Matlack (DE), Inc. Delaware

Bayonne Terminals, Inc. Pennsylvania

Matlack International, Inc. Delaware