Industrial Services of America, Inc. Announces Fourth Quarter and 2012 Results Business Wire LOUISVILLE, Ky. -- April 1, 2013 Industrial Services of America, Inc. (NASDAQ: IDSA), a company that buys, processes and markets ferrous and non-ferrous metals and other recyclable commodities for domestic users and export markets and offers programs and equipment to help businesses manage waste, today announced financial results for the year and fourth quarter ended December31, 2012. Revenue for 2012 was $194.2 million compared with $277.2 million in 2011. Net loss for 2012 was $(6.6) million, or $(0.95) per diluted share, which included a non-cash impairment charge to goodwill of $3.9 million, net of income tax, compared with net loss of $(3.9) million, or $(0.56) per diluted share for 2011. Excluding the goodwill impairment, the net loss for 2012 would have been $(2.7) million, net of income tax, or $(0.39) per diluted share. Revenue for the fourth quarter of 2012 was $37.0 million compared with $50.0 million in the fourth quarter of 2011. Net loss for the fourth quarter of 2012 was $(4.5) million, or $(0.65) on a diluted share basis, which included a non-cash impairment charge to goodwill of $3.9 million, net of income tax, compared with a net loss of $(1.8) million, or $(0.26) per diluted share, for the comparable period in 2011. The company continues to manage its way through a challenging market environment. During 2012, ISA reduced overhead costs by approximately $3,400,000 in an effort to adjust capacity to match the reduction in scrap processing volumes in the eastern U.S. The market remains intensely competitive for scrap materials. Key Highlights 2012 *ISA launched its Pick.Pull.Save retail auto parts division in July. This division has gained significant market traction, operating on 15 acres at ISA’s headquarters facility and maintaining over 1,200 autos in inventory. *ISA’s shredder has benefitted from higher quality product inflow as a result of scrap flows from the Pick.Pull.Save operation, which is adjacent to the shredder. *The company has used excess cash to reduce its term debt ahead of schedule. ISA was recently recognized by the Institute of Scrap Recycling Industries (“ISRI”), the scrap industry’s leading trade group, as a leader in the safe and efficient operation of its fleet of equipment. Key Financial Highlights *Earnings Before Interest, Taxes, Depreciation and Amortization and Impairment charges ("Adjusted EBITDA") for the year ended December31, 2012 was $2.3 million. *Current ratio at December31, 2012 was 3.9 to 1. *Working capital as of December31, 2012 was $25.1 million. *Credit facility and term debt extended through April 30, 2014. ISA’s SEC filings are available for review at the Securities and Exchange Commission web site at http://www.sec.gov/edgar/searchedgar/companysearch.html. 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, ISA offers commercial, industrial and business customers a variety of programs and equipment to manage waste. More information about ISA is available at 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 waste managing systems and equipment, competitive pressures in the waste managing business, and loss of customers. Further information on factors that could affect ISA's results is detailed in ISA's filings with the Securities and Exchange Commission. ISA undertakes no obligation to publicly release the results of any revisions to the forward-looking statements. FINANCIAL RESULTS AND SUPPLEMENTAL FINANCIAL INFORMATION FOLLOW Industrial Services of America, Inc. and Subsidiaries Consolidated Statements of Income THREE MONTHS ENDED YEAR ENDED December 31, December 31, December 31, December 31, 2012 2011 2012 2011 Revenue from $ 1,401,154 $ 1,215,224 $ 5,087,555 $ 5,279,411 services Revenue from 35,571,876 48,768,999 189,144,375 271,933,501 product sales Total revenue 36,973,030 49,984,223 194,231,930 277,212,912 Cost of goods sold for 1,322,377 1,133,552 4,655,469 4,716,484 services Cost of goods sold for 33,649,648 48,675,644 180,344,790 260,775,526 product sales Inventory adjustment for — — — 3,441,140 lower of cost or market Total cost of 34,972,025 49,809,196 185,000,259 268,933,150 goods sold Provision for employee — — 228,400 — terminations and severances Other selling, general and 2,654,930 3,103,385 11,196,562 12,394,075 administrative expense Total selling, general and 2,654,930 3,103,385 11,424,962 12,394,075 administrative expense Impairment 6,840,046 — 6,840,046 — loss, goodwill (Loss) income before other (7,493,971 ) (2,928,358 ) (9,033,337 ) (4,114,313 ) income (expense) Other income (expense) Interest (372,461 ) (423,125 ) (1,797,421 ) (2,367,944 ) expense Interest 481 3,339 9,075 18,865 income Gain on sale 11,809 (4,156 ) 46,667 107,148 of assets Provision for lawsuit — — — — settlement Other income 81 91,815 21 (566,028 ) (loss) (360,090 ) (332,127 ) (1,741,658 ) (2,807,959 ) (Loss) income before income (7,854,061 ) (3,260,485 ) (10,774,995 ) (6,922,272 ) taxes Income tax (benefit) (3,350,923 ) (1,436,318 ) (4,154,505 ) (3,041,456 ) provision Net (loss) $ (4,503,138 ) $ (1,824,167 ) $ (6,620,490 ) $ (3,880,816 ) income Basic (loss) earnings per $ (0.65 ) $ (0.26 ) $ (0.95 ) $ (0.56 ) share Diluted (loss) earnings per $ (0.65 ) $ (0.26 ) $ (0.95 ) $ (0.56 ) share Weighted shares outstanding: Basic: 6,944,267 6,940,517 6,942,912 6,926,870 Diluted: 6,944,267 6,940,517 6,942,912 6,926,870 INDUSTRIAL SERVICES OF AMERICA, INC. SUPPLEMENTAL FINANCIAL INFORMATION Reconciliation of Adjusted Net Loss and Earnings per Share: The following table reconciles the Company's adjusted net loss and earnings per share (basic and diluted) to net loss and earnings per share as reported in accordance with GAAP ($ in thousands, except per share data): Three months Per share Year ended Per share ended December 31, amount December 31, amount 2012 2012 Net loss as $ (4,503 ) $ (0.65 ) $ (6,620 ) $ (0.95 ) reported Impairment charges, net 3,899 0.56 3,899 0.56 of income taxes Net (loss) income as $ (604 ) $ (0.09 ) $ (2,721 ) $ (0.39 ) adjusted Reconciliation of Adjusted EBITDA ^(1): Three Months ended Year ended December 31, December 31, 2012 2011 2012 2011 Net (loss) $ (4,503,138 ) $ (1,824,167 ) $ (6,620,490 ) $ (3,880,816 ) income Interest 372,461 423,125 1,797,421 2,367,944 expense Income tax (benefit) (3,350,923 ) (1,436,318 ) (4,154,505 ) (3,041,456 ) provision Impairment loss, 6,840,046 — 6,840,046 — goodwill Depreciation 884,018 942,397 3,651,353 3,767,110 Amortization 187,500 187,500 750,000 750,000 Adjusted $ 429,964 $ (1,707,463 ) $ 2,263,825 $ (37,218 ) EBITDA ^(1) ^(1) Adjusted EBITDA is calculated by the Company as net income before interest expense, income tax expense, depreciation and amortization and impairment charges. The Company uses Adjusted EBITDA as a key performance measure of results of operations for purposes of evaluating performance internally. This non-GAAP measurement is not intended to replace the presentation of our financial results in accordance with GAAP. Rather, we believe the Adjusted EBITDA calculation provides additional information to investors and debt holders due to the fact that tax credits, tax rates and other tax related items vary by company. Additionally, years of service for fixed assets and amortizable assets are based on company judgment. Finally, companies have several ways of raising capital which can affect interest expense. We believe the presentation of Adjusted EBITDA provides a meaningful measure of performance exclusive of these unique items. Contact: Industrial Services of America, Inc. Harry Kletter or Alan Gildenberg, 502-366-3452 firstname.lastname@example.org http://www.isa-inc.com/
Industrial Services of America, Inc. Announces Fourth Quarter and 2012 Results
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