Industrial Services of America, Inc. Announces Fourth Quarter and 2012 Results

  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
hklet@isa-inc.com
http://www.isa-inc.com/
 
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