Industrial Services of America, Inc. reports 4(th) quarter and 2008 results

Business Wire, March 31, 2009

LOUISVILLE, Ky. -- Industrial Services of America, Inc. (NASDAQ: IDSA), a company that buys, processes and markets recyclable commodities and offers programs and equipment to help businesses manage wastes, today reported audited financial results for the fourth quarter and full year 2008.

For the full fiscal year 2008, net income was $1.5 million ($.43 per basic and diluted share), compared with $2.6 million ($.71 per share) for fiscal year 2007. Total revenues increased to $100.0 million in 2008 compared to $77.0 million in 2007.

For the fourth quarter 2008, the net loss was $2.5 million ($.69 per basic and diluted share), including one-time charges of $0.37 per share related to inventory write-downs associated with market conditions and a lawsuit settlement reserve. The year-earlier quarter’s earnings were $566,295, or $0.16 per share. Revenues decreased to $10.6 million in the fourth quarter compared to $21.6 million in the fourth quarter of 2007.

"Despite unprecedented volatility and market conditions in the fourth quarter, strong demand and pricing for recycled products and commodities during the first three quarters drove ISA's profitability for the year," said Brian Donaghy, ISA's president and chief operating officer. "As the credit crisis intensified we took proactive steps to reduce our run-rate cost footprint and control our inventory exposure ahead of what turned out to be a very rapid deterioration in economic conditions. These measures enabled ISA to mitigate its operating loss and take advantage of strategic expansion opportunities. Furthermore, as a result of these measures, ISA expects to return to profitability in the first quarter of 2009.”

Other information about fiscal year 2008:

• Earnings before interest, taxes, depreciation and amortization (EBITDA) was $5,045,844, compared with $6,266,545 in 2007. (See the EBITDA reconciliation below.)
• Shipments of ferrous material were 81,050 gross tons in 2008, versus 81,947 gross tons during full-year 2007. Ferrous inventory at year-end 2008 was 11,374 gross tons at a unit cost of $190.10 per gross ton, compared with 7,713 gross tons at a unit cost of $239.65 per gross ton at December 31, 2007.
• 34.3 million pounds of nonferrous material were shipped during fiscal year 2008, compared with 28.8 million pounds during 2007. Nonferrous inventories at year end 2008 were 3.7 million pounds with a unit cost of $0.547 per pound, compared with 2.0 million pounds at a unit cost of $1.363 per pound at year-end 2007.

Other information about the fourth quarter of 2008:

• Earnings before interest, taxes, depreciation and amortization (EBITDA) was $(3,550,693), compared with $1,363,872 in 2007. (See the EBITDA reconciliation below.)
• The one-time charges of $0.37 per share related to a previously announced write-down of approximately $1.2 million to revalue inventory to current market pricing and a $990,000 reserve for the settlement of a lawsuit.

2009 first quarter outlook

Pricing and demand for recycled metals and commodities continues to remain weak in the first quarter. However, ISA has sold and shipped more than 90 percent of the stainless steel and high-temperature alloys inventories that were acquired in the Venture Metals transaction. Based on two months of actual results and expected trends, ISA expects to return to profitability in the first quarter of 2009.

About ISA

Headquartered in Louisville, Kentucky, Industrial Services of America, Inc., is a publicly traded company whose core business is buying, processing and marketing scrap metals and recyclable materials for domestic users and export markets. Additionally, the company offers commercial, industrial and business customers a variety of programs and equipment to efficiently manage waste. More information about ISA is available at http://www.isa-inc.com.

This news release contains forward-looking statements that involve risks and uncertainties that could cause actual results to differ from predicted results. Specific risks include fluctuations in the price of recycled materials, varying demand for waste managing systems, equipment and services, competitive pressures in the waste managing systems and equipment, competitive pressures in the waste managing business and loss of customers. Further information on factors that could affect the Company's results is detailed in the Company's filings with the Securities and Exchange Commission. The Company undertakes no obligation to publicly release the results of any revisions to the forward-looking statements.