Industrial Services of America, Inc. Announces Management Services Agreement
with Algar, Inc.
LOUISVILLE, Ky. -- December 3, 2013
Industrial Services of America, Inc. (NASDAQ: IDSA) (“ISA” or the “Company”),
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 that
it has entered into a management services agreement (the “Management
Agreement”) with Louisville-based Algar, Inc. (“Algar”), effective December 1,
The Management Agreement provides for various executives and employees of
Algar to assist ISA with day-to-day operations, in an attempt to strengthen
the Company’s financial position and operating performance in the challenging
scrap metal recycling market. Algar’s executives and employees have extensive
experience working in scrap procurement and processing. Sean Garber, Algar’s
Chairman and Chief Executive Officer, formerly worked at ISA and was its
President from 1997 to 2000. As such, Mr. Garber has direct experience with
the Company’s facility and operations. In accordance with the Management
Agreement, the Company’s Board of Directors has appointed Mr. Garber to serve
ISA’s Board of Directors considers Algar’s experience in the scrap recycling
industry, familiarity with ISA and immediate availability to fulfill the role
critical to its decision to enter into the Management Agreement with Algar.
The term of the Management Agreement is effective December 1, 2013 and extends
through December 31, 2016.
“We are very pleased to have identified a group with extensive industry and
operating experience in scrap recycling. We are excited about Sean’s plan to
grow the Company through the acquisition of auto parts companies and other
businesses. We believe he and his team can immediately and beneficially impact
ISA’s operations, and welcome him to the Company,” stated Orson Oliver, the
Company’s Chairman and interim Chief Executive Officer.
Mr. Garber added, “My team and I are excited to bring to bear our industry
expertise, operating experience and ability to develop a strong corporate
culture to ISA. I am thankful to Mr. Kletter for giving me the opportunity to
come to Louisville in 1996. I look forward to working with the ISA team to
build the Company into a larger, stronger business, which ultimately should
bring value to ISA shareholders.”
As part of the Management Agreement, Mr. Garber and Mr. Oliver have received
an Irrevocable Proxy from Harry Kletter, K & R, LLC and The Harry Kletter
Family Limited Partnership (collectively, “Kletter”), which provides Mr.
Oliver and Mr. Garber joint voting authority over the shares of the Company’s
common stock owned by Kletter. Mr. Kletter is the Company’s largest
The Management Agreement provides annual incentive compensation during its
term equal to 10% of any increases in year-over-year pre-tax income. Also in
connection with the Management Agreement, ISA has granted an option for a
total of 1,500,000 shares of its common stock to Algar at an exercise price
per share of $5.00. The issuance of such options is subject to shareholder
approval and exercisability provisions based upon the Company’s performance.
The December 2, 2013 closing price per share of the Company’s common stock on
the NASDAQ Capital Market was $2.54. The Company will reimburse Algar for
expenses incurred in performing its services under the Management Agreement,
including salaries of executives and other employees.
ISA and Algar have also agreed to use their best efforts to effect a business
combination between them as soon as is reasonably practicable.
ISA’s SEC filings are available for review at the Securities and Exchange
Commission web site at
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.
About Algar, Inc.
Algar specializes in the procurement and sale of new and used auto parts, as
well as in automotive and metal recycling. The Auto Parts division is engaged
in the business of selling used and new auto parts to body shops, car dealers,
auto parts dealers and walk in retail customers. The Automotive and Metal
Recycling division purchases junk and wrecked cars from auto parts yards,
wreckers and individuals in order to process and recycle. The Ferrous
Division’s major products include recycling of steel and iron products,
whereas the Non-Ferrous Division recycles copper, aluminum, and brass.
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, loss of customers, and the ability
of the Company to negotiate and consummate a business combination with Algar
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
Industrial Services of America, Inc.
Alan Schroering, 502-214-3710
Vice President of Finance and Interim Chief Financial Officer
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