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 third quarter ended September 30, 2013.
Revenue for the third quarter of 2013 was $33.3 million compared with $45.7 million in the third quarter of 2012. Net loss for the third quarter of 2013 was $(2.2) million, or $(0.31) on a per diluted share basis, compared with a net loss of $(0.9) million, or $(0.13) on a per diluted share basis, for the comparable period in 2012. Included in the net loss for the third quarter ended September 30, 2013 is a charge of approximately $1.9 million to write down the value of the Company's stainless steel inventory at September 30, 2013, in accordance with lower of cost or market accounting guidance. As a result of reduced market prices, a lower of cost or market assessment was performed for our nickel content inventories. Due to management’s determination to discontinue the production of stainless steel blends, a subset of the stainless steel market, this assessment embodied the assumption of immediate sale of these blends in their current state. There were no write-downs from our ferrous or non-ferrous operations. In the fourth quarter of 2013, we expect to record an impairment charge of approximately $3.5 million related to intangible assets associated with our stainless steel business.
- In October 2013, subsequent to the close of the third quarter, the Company secured $4 million of new financing through its WESSCO division ("WESSCO"), and used a portion of the proceeds to reduce its term loan with Fifth Third Bank (the "Bank");
- In December the Company appointed Sean Garber to be its President and to oversee the day-to-day management of the Company. Mr. Garber, a scrap industry veteran who had previously been an executive at ISA, is also currently an executive of Algar, Inc., a supplier of scrap metal to processors such as ISA;
- Also in December, the Company entered into a Management Services Agreement with Algar (the "Management Agreement"), whereby Algar will provide business, financial and organizational strategy consulting services to ISA.
The Company's credit facility with the Bank (the "Fifth Third Loan") is scheduled to mature in April 2014. The Company is actively in the process of renegotiating its debt. This debt renegotiation process includes the Bank as well as other banks. Management plans to complete this debt renegotiation as soon as practicable.