Industrial Services of America, Inc. Announces $3.0 Million Equity Investment and $17.8 Million Credit Facility

  Industrial Services of America, Inc. Announces $3.0 Million Equity
  Investment and $17.8 Million Credit Facility

Business Wire

LOUISVILLE, Ky. -- June 16, 2014

Industrial Services of America, Inc. (NASDAQ: IDSA), a company that buys,
processes and markets ferrous and non-ferrous metals and other recyclable
commodities, and offers waste management programs and equipment to commercial
customers, today announced a $3 million equity investment from Recycling
Capital Partners, LLC (“RCP”) and a $17.8 million credit facility from Wells
Fargo Bank, National Association (“Wells Fargo”).

Recycling Capital Partners, LLC is an investment entity principally owned by
Daniel M. Rifkin, former president of OmniSource Corporation and the founder
and CEO of MetalX LLC, a scrap metal recycling company headquartered in
Waterloo, Indiana.

RCP’s equity investment delivers significant strategic value to ISA, providing
capital from one of the most respected names in the scrap metal industry. As a
third-generation executive of OmniSource, Mr. Rifkin led the growth of his
family’s company into a multi-billion dollar enterprise processing over 5
million tons of ferrous scrap and 1 billion pounds of non-ferrous scrap
annually. OmniSource was acquired by Steel Dynamics, Inc. (NASDAQ: STLD) for
approximately $1.1 billion in 2007. After leaving Steel Dynamics in 2008 to
pursue other interests, Rifkin returned to the industry in 2012 with the
founding of MetalX.

RCP’s investment includes the purchase of 857,143 shares of ISA’s common
stock, par value $0.0033 per share, at a price of $3.50 per share. In
addition, RCP received a five-year warrant to purchase an additional 857,143
shares of common stock at a price of $5.00 per share. In connection with the
investment, RCP is currently entitled to designate one member to the Company’s
Board of Directors. The Company also granted RCP registration rights with
respect to the common stock and certain right of first refusal rights with
respect to additional equity investments in the Company.

“The entire ISA team is energized by the resources and experience that RCP
brings to the company, which allow us to pursue our growth strategy and other
initiatives. With stronger balance sheet, we expect to focus on building value
for shareholders,” said Sean Garber, ISA’s President. “This is truly a
game-changing moment in ISA’s history.”

Danny Rifkin, the principal investor and managing member of RCP, added, “We
are very pleased to have completed this investment in ISA and believe that the
combination of the equity investment, the new credit facility and dynamic new
leadership will stimulate the company’s growth and performance. This
investment supports our view that this industry presents viable opportunities
for long-term growth.”

New Credit Facility

In addition to closing on $3 million of new equity capital, ISA also closed on
a $17.8 million credit facility with Wells Fargo. The new credit facility
includes a $15 million revolving line of credit and a $2.8 million equipment
term loan. The new credit facility replaces ISA’s existing loan with Fifth
Third Bank at a significantly lower interest cost, reduced fees and more
accommodating financial covenants.

The revolver bears interest an annual rate of LIBOR plus 3.00%, and the
equipment loan bears interest at LIBOR plus 3.25%. ISA may borrow up to 85% of
the value of its eligible accounts receivable and 65% of the value of eligible
inventory, offering incremental availability relative to the Fifth Third
revolver. Both loans mature five years from the closing date, with the term
loan amortizing ratably over the next 60 months.

“We couldn’t be happier with the outcome of our financing efforts,” said Orson
Oliver, Chairman of the Board and Interim CEO of ISA. “We entertained
proposals from several well-known lenders and equity investors, but thought
the strategic fit of RCP and the creative approach of Wells Fargo
distinguished these partners in our search. We are extremely pleased to know
that ISA is on sound financial footing and capitalized for future growth.”

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. 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.

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; our ability to
successfully integrate the operations of acquired businesses, if any, and
achieve expected synergies and operating efficiencies from the acquisition, in
each case within expected time-frames or at all; 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.

Contact:

Industrial Services of America, Inc.
Alan Schroering, 502-214-3710
Vice President of Finance
and Interim Chief Financial Officer
aschroering@isa-inc.com
 
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