Industrial Services Of America, Inc. Announces Fourth Quarter And 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 waste, today announced financial results for the year and fourth quarter ended December 31, 2011.

Revenue for 2011 was $276.9 million compared with $343.0 million in 2010. Net loss for 2011 was $(3.9) million, or $(0.56) per diluted share, compared with net income of $8.1 million, or $1.21 per diluted share, for 2010. Revenue for the fourth quarter of 2011 was $50.0 million compared with $99.5 million for the same period in 2010. Net income for the quarter was $(1.8) million, or $(0.26) per diluted share, compared with $2.0 million, or $0.29 per diluted share, for the fourth quarter of 2010.

Key Highlights 2011
  • Ferrous shipment volumes increased 7.5% year-over-year
  • Cash flow from operations was $19.0 million, primarily as a result of a decrease in working capital
  • Repaid debt by $17 million
  • Current ratio at December 31, 2011, was 3.2 to 1
  • We exited 2011 with $29 million of working capital and $20 million of availability on our revolving line of credit

Harry Kletter, founder and Chairman of ISA, stated, “The market demand for our stainless products was extremely volatile in 2011. While this resulted in short-term negative results, we believe the long-term outlook for this business remains strong. We have continued to invest in our people and our processes, and we expect to achieve improved profitability in our recycling segment. We have brought new talent into the organization, including the addition of two new board members with exemplary credentials, Dr. David Russell and Ms. Rudy Scarito. We believe we can benefit from their varied but relevant backgrounds. While we are still in the early days of 2012, we are beginning to see some benefits from our efforts.”

Brian Donaghy, President and Chief Operating Officer of ISA, stated, “We have learned a lot since 2009 when we acquired the stainless steel business and started operating our shredder. With more than 50 acres of land, access to three major modes of transportation and ample on-site storage facilities, we recognize that we have an ideally located, state-of-the-art facility. Despite challenging industry conditions, which are apparent throughout the market, we have maintained strong relationships with both suppliers and customers. Our young team continues to season and we continue to believe ISA’s performance will steadily improve throughout 2012 and beyond.”

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.

Key words: recycling, scrap, ferrous, non-ferrous materials, waste management, international markets, global markets.

FINANCIAL RESULTS AND SUPPLEMENTAL FINANCIAL INFORMATION FOLLOW
 

Industrial Services of America, Inc. and Subsidiaries

Consolidated Statements of Income
           
   
YEAR ENDED THREE MONTHS ENDED
Dec. 31, 2011 Dec. 31, 2010 Dec. 31, 2011 Dec. 31, 2010
 
Revenue from services $ 5,279,411 $ 6,212,549 1,215,224.00 $ 1,381,310
Revenue from product sales   271,590,661     336,792,766     48,738,677.00     98,089,777  
Total Revenue 276,870,072 343,005,315 49,953,901 99,471,087
 
Cost of goods sold for services 4,716,484 5,401,521 1,133,552 927,481
Cost of goods sold for product sales 260,449,352 310,318,773 48,104,259 92,664,680
Inventory adjustment for lower cost or market   3,441,140     -     -     -  
Total Cost of goods sold 268,606,976 315,720,294 49,237,811 93,592,161
 
Selling, general and administrative expense   12,720,249     13,736,685     3,674,770     3,087,333  
 
(Loss) income before other income (expense) (4,457,153 ) 13,548,336 (2,958,680 ) 2,791,593
 
Other income (expense)
Interest expense (2,025,104 ) (1,473,037 ) (392,803 ) (451,088 )
Interest income 18,865 29,255 3,339 5,457
Gain (loss) on sale of assets 107,148 281,241 (4,156 ) 25,200
Other (loss) income   (566,028 )   40,133     91,815     (376 )
(2,465,119 ) (1,122,408 ) (301,805 ) (420,807 )
 
(Loss) income before income taxes (6,922,272 ) 12,425,928 (3,260,485 ) 2,370,786
 
Income tax (benefit) provision   (3,041,456 )   4,373,319     (1,436,318 )   351,262  
 
Net (loss) income $ (3,880,816 ) $ 8,052,609   $ (1,824,167 ) $ 2,019,524  
 
 
Basic (loss) earnings per share   (0.56 )   1.22     (0.26 )   0.30  
Diluted (loss) earnings per share   (0.56 )   1.21     (0.26 )   0.29  
 
Weighted shares outstanding:
Basic: 6,926,870 6,622,480 6,940,517 6,790,026
Diluted: 6,926,870 6,666,480 6,940,517 6,837,185
     

INDUSTRIAL SERVICES OF AMERICA, INC.

 

SUPPLEMENTAL FINANCIAL INFORMATION

 
 

Reconciliation of EBITDA (1) :
           
      Three Months ending

December 31,
  Twelve Months ending

December 31,
     

2011
 

2010
 

2011
 

2010
Net Income     (1,824,167)   2,019,524   (3,880,816)   8,052,609
Interest expense     392,802   451,088   2,025,104   1,473,037
Income taxes     (1,436,317)   351,262   (3,041,455)   4,373,319
Depreciation     942,397   898,296   3,767,110   3,511,874
Amortization     187,500   307,500   750,000   375,000
EBITDA (1)     (1,737,785)   4,027,670   (380,057)   17,785,839
   

(1) EBITDA is calculated by the Company as net income before interest expense, income tax expense, depreciation and amortization. The Company uses 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 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 EBITDA provides a meaningful measure of performance exclusive of these unique items.

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