Date: November 5, 2008
Source: Industrial Services of America, Inc.
Net income was a third quarter record $1.3 million ($0.36 per share)
Non-ferrous shipment volumes up 42%
Company reports 22nd consecutive profitable quarter
Industrial Services of America, Inc. (IDSA), a company that buys, processes and markets recyclable commodities and offers programs and equipment to help businesses manage wastes, today reported higher revenues and earnings for the third quarter and nine months ending September 30, 2008.
For the third quarter of fiscal 2008
Total revenues increased 61% to $28.8 million, compared with $17.9 million in the similar 2007 period.
Earnings before interest, taxes, depreciation and amortization (EBITDA) were $2.7 million, compared with EBITDA of $1.2 million for the 2007 quarter. (See attached reconciliation.)
Net income grew 234 percent to $1,280,115 (basic and diluted earnings of $0.36 per share), a third quarter record. That compares with net income of $383,159 (basic and diluted earnings of $0.11 per share) in the third quarter of 2007. Basic and diluted shares outstanding were 3,593,966 in the third quarter of 2008 and 3,640,899 in 2007.
Non-ferrous shipment volumes increased 42.2% over the third quarter of 2007, and ferrous shipment volumes rose 2.4% over the same period.
"Our third quarter results reflected a strong company operating performance that took place prior to the volatility in the commodities markets," said Brian Donaghy, ISA President and Chief Operating Officer. "Revenue from product sales for the period increased by 76 percent over year-ago product sales revenue, driven by a 42.2% increase in non-ferrous shipment volumes, 2.4% more ferrous shipment volumes and higher year-over-year pricing."
"Additionally," said Donaghy, "our management services division provided a solid contribution to ISA, with service revenue up by 13% over the year-ago quarter."
For the first nine months of fiscal 2008
Total revenues increased 62% to $89.4 million, compared with $55.4 million in the first half of 2007.
Earnings before interest, taxes, depreciation and amortization (EBITDA) were $8.6 million, compared with EBITDA of $4.9 million for the 2007 period. (See attached reconciliation.)
Net income increased 102 percent to $4,029,298 (basic and diluted earnings of $1.12 per share), compared with net income of $1,997,538 (basic and diluted earnings of $0.55 per share) in the first nine months of 2007. Basic and diluted shares outstanding were 3,602,703 in 2008 and 3,640,899 in 2007.
Year-to-date non-ferrous shipment volumes increased 52.6% over the first nine months of 2007, and ferrous shipment volumes rose 12.2% over the same period.
"While both lowering manufacturing activity and commodity prices retreating dramatically at the end of the third quarter and into the fourth quarter, we have successfully managed our business. Our inventory quantities are extremely lean and we are looking forward to the opportunity that this market is presenting to us to build our inventories at attractive prices," said Harry Kletter, ISA Chairman.
As the company heads into the final months of fiscal 2008, Kletter said ISA is positioned well with a healthy balance sheet, ample credit facilities and the diversity of its management services operations. With the improved performance of Waste Equipment Sales & Service, the company has allocated additional sales staff to the division to boost equipment sales and rentals.
The Company's 2008 Form 10-Q filing is available for review at the Securities and Exchange Commission web site, 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, the company offers commercial, industrial and business customers a variety of programs and equipment to efficiently 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 varying demand for waste managing systems, equipment and services, competitive pressures in the waste managing systems and equipment, competitive pressures in the waste managing business, loss of customers and fluctuations in the price of recycled materials. Further information on factors that could affect the Company's results is detailed in the Company's filings with the Securities and Exchange Commission. The Company 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.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007
(UNAUDITED)
2008 2007
Revenue from services $ 4,875,379 $ 4,311,553
Revenue from product sales 23,962,449 13,617,257
Total Revenue 28,837,828 17,928,810
Cost of goods sold for services 4,578,407 3,841,742
Cost of goods sold for product sales 19,749,262 11,980,863
Reduction of cost of goods sold - (337,516 )
Total Cost of goods sold 24,327,669 15,485,089
Selling, general and administrative expense 2,569,743 1,791,116
Income before other income (expense) 1,940,416 652,605
Other income (expense)
Interest expense (76,628 ) (91,096 )
Interest income 19,060 30,238
Gain/(loss) on sale of assets 14,133 9,782
Other income 158,884 193
115,449 (50,883 )
Income before income taxes 2,055,865 601,722
Income tax provision 775,750 218,563
Net income $ 1,280,115 $ 383,159
Basic earnings per share $ .36 $ 0.11
Diluted earnings per share $ .36 $ 0.11
Weighted shares outstanding:
Basic 3,593,966 3,640,899
Diluted 3,593,966 3,640,899
INDUSTRIAL SERVICES OF AMERICA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007
(UNAUDITED)
2008 2007
Revenue from services $ 13,759,177 $ 11,804,056
Revenue from product sales 75,673,131 43,557,599
Total Revenue 89,432,308 55,361,655
Cost of goods sold for services 12,821,444 10,769,624
Cost of goods sold for product sales 62,110,231 36,909,805
Reduction of cost of goods sold - (480,060 )
Total Cost of goods sold 74,931,675 47,199,369
Selling, general and administrative expense 7,861,160 4,804,324
Income before other income (expense) 6,639,473 3,357,962
Other income (expense)
Interest expense (305,197 ) (204,948 )
Interest income 63,057 92,002
Gain/(loss) on sale of assets 30,614 (1,606 )
Other income 287,550 22,551
76,024 (92,001 )
Income before income taxes 6,715,497 3,265,961
Income tax provision 2,686,199 1,268,423
Net income $ 4,029,298 $ 1,997,538
Basic earnings per share $ 1.12 $ 0.55
Diluted earnings per share $ 1.12 $ 0.55
Weighted shares outstanding:
Basic 3,602,703 3,640,899
Diluted 3,602,703 3,640,899
INDUSTRIAL SERVICES OF AMERICA, INC.
SUPPLEMENTAL FINANCIAL INFORMATION
Reconciliation of EBITDA (1):
Three months ending Sept. 30, Nine Months ending Sept. 30,
2008 2007 2008 2007
Net Income 1,280,115 383,159 4,029,298 1,997,538
Interest expense 76,628 91,096 305,197 204,948
Income taxes 775,750 218,563 2,686,199 1,268,423
Depreciation 534,843 515,121 1,575,843 1,431,764
Amortization - - - -
EBITDA (1) 2,667,336 1,207,939 8,596,537 4,902,673
(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.
For more information, contact:
Industrial Services of America, Inc.
Harry Kletter, 502-366-3452
hklet@isa-inc.com
or
Alan Schroering, 502-366-3452
aschroering@isa-inc.com
http://www.isa-inc.com.
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