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Industrial Services Of America, Inc. Reports Third Quarter 2011 Results

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 wastes, today reported financial results for the third quarter ending September 30, 2011.

The Company posted sales of $55.8 million for the quarter ended September 30, 2011 compared with $76.6 million in the third quarter of 2010. Net loss was $4.5 million (basic and diluted loss of $0.67 per share) in the third quarter of 2011, compared with net income of $1.9 million (basic and diluted earnings of $0.28 per share) in the third quarter of 2010. Included in the net loss for the third quarter ended September 30, 2011 is a charge of approximately $3.4 million to write down the value of the Company’s stainless steel inventory at September 30, 2011, due to the weakness in the economy and unusually steep nickel and stainless steel price declines in the third quarter of 2011, in accordance with lower of cost or market accounting guidance. There were no write-downs from our ferrous and non-ferrous operations.

For the three months ending September 30, 2011:

  • Total revenue was $55.8 million in the third quarter of 2011, compared with $76.6 million in the third quarter of 2010.
  • Net loss was $4,536,007 (basic and diluted earnings of $0.67 per share) in the third quarter of 2011, compared with net income of $1,922,621 (basic and diluted earnings of $0.28 per share) in the third quarter of 2010. Basic and diluted weighted average shares outstanding were 6,789,917 in the third quarter of 2011 and were 6,784,917 and 6,835,480 respectively (split-adjusted) for basic and diluted shares in the third quarter of 2010.
  • Earnings (Loss) before interest, taxes, depreciation and amortization (EBITDA) for the third quarter of 2011 was $(6,038,526) compared with EBITDA of $4,508,515 for the third quarter of 2010. (See attached reconciliation.)

For the nine months ending September 30, 2011:

  • Total revenue was $226.9 million for the first nine months of 2011, compared with $243.5 million for the first nine months of 2010.
  • Net loss was $2,056,649 (basic and diluted loss of $0.30 per share) for the first nine months of 2011, compared with net income of $6,033,085 (basic and diluted earnings of $0.92 and $0.91 per share, respectively) for the first nine months of 2010. Basic and diluted weighted average shares outstanding were 6,922,271 in the third quarter of 2011 and were 6,566,879 and 6,610,879 respectively (split-adjusted) for basic and diluted shares in the third quarter of 2010.
  • Earnings before interest, taxes, depreciation and amortization (EBITDA) for the first nine months of 2011 was $1,357,727 compared with EBITDA of $13,758,169 for the first nine months of 2010. (See attached reconciliation.)

Key Highlights for the Third Quarter Ending September 30, 2011

  • Financial position remains strong
  • Ferrous orders remain stable
  • Upgraded inventory systems and yards
  • Upgraded shredder to add more capacity
  • Added industry veteran to assist in stainless operations management

Recycling Volumes – 3 rd Quarter 2011 Summary

  • Stainless volumes decreased 70.9% from the third quarter of 2010
  • Ferrous volumes increased 8.7% from the third quarter of 2010
  • Non-Ferrous volumes decreased 16.2% from the third quarter of 2010

Brian Donaghy, President ISA, commented, “The third quarter was very challenging. The global economy remained uncertain and commodity prices were very volatile during the period. During the early part of 2011 we actively purchased inventory for our Stainless Steel and Alloys division in response to what we saw as consistent demand. This was answered with a steep decline in nickel prices which resulted in reduced demand from stainless steel scrap consumers worldwide. We have since started to see some renewed demand from consumers and look for this to continue into the first quarter of 2012. We are currently shipping in all divisions at what we feel are acceptable levels given the time of year and the current economic uncertainty.”

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