Date: November 10, 2010
Source: Industrial Services of America, Inc.
Industrial Services of America, Inc. (IDSA) today announced financial results for its third quarter ended September 30, 2010. Revenue for the third quarter of 2010 was $76.6 million compared with $80.0 million for the same period in 2009. Net income for the quarter was $1.9 million, or $0.28 per diluted share, compared with $2.2 million, or $0.37 per diluted share, for the third quarter of 2009. Diluted shares outstanding increased to 6,835,480 from 5,864,585 diluted shares in the third quarter of 2009.
Key Highlights for the Third Quarter Ending September 30, 2010
Ferrous shipment volumes increased 90% quarter-over-quarter, resulting primarily from ongoing improvements in shredder efficiency The Company began the installation of an upgrade to its downstream non-ferrous recovery system, designed to increase yields and profit margins Industry veteran Daniel Gascoyne joined ISA as Executive Vice President to lead the Company's Non-Ferrous Division Non-Ferrous shipment volumes were 13% higher than shipment volumes in the second quarter ISA's Alloys division continued to perform well with respect to profit margins and capacity.
Key Highlights for the Nine Months Ending September 30, 2010
Revenues up 70% year-over-year
Net Income up 61% year-over-year
Diluted EPS up 36% year-over-year, despite an increase in shares outstanding
Harry Kletter, Chairman of the Board of Industrial Services of America, commented, "When we look at our earnings, our Alloys, Ferrous and Non-Ferrous divisions all performed solidly during the quarter."
The third quarter of 2010 was the seventh consecutive quarter of profitability for ISA, following the dramatic downturn in the industry and the global economy in the fourth quarter of 2008.
Mr. Kletter said, "Scrap recycling is not a monthly or quarterly business. We buy and sell scrap in response to customer orders, but we can't predict the timing. Sometimes we have firm orders that don't ship until the following quarter. But we have grown our business every year, and 2010 is no different."
Mr. Kletter commented, "In addition, I'd like to express how proud we are to have been recognized by Forbes as number 8 on its list of America's 100 Best Small Companies. This type of national recognition validates ISA's prominence as one of the leading performers in its class of public companies. We remain focused on continuing this strong performance."
Mr. Kletter encourages interested parties to listen to ISA's earnings call (information below) and attend ISA's presentation at The Wall Street Analyst Forum, being held at The University Club in New York City on November 11, 2010.
Conference Call to Discuss Third Quarter 2010 Results
ISA will host a conference call on Wednesday, November 10, 2010 at 10:00 AM Eastern time to discuss third quarter results. Participants can access the call by dialing:
U.S. and Canada Dial-in Number: 877-354-6067
Conference ID#: 19675769
Callers should identify the Industrial Services of America earnings results call.
A replay will be available two hours after the call through midnight November 6, 2010 by calling: 800-642-1687 or 706-645-9291.
ISA's 2010 SEC filings are available for review at the Securities and Exchange Commission web site at 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 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 fluctuations in the price of recycled materials, 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, 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.
FINANCIAL RESULTS AND
SUPPLEMENTAL FINANCIAL INFORMATION
FOLLOW
INDUSTRIAL SERVICES OF AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009
(UNAUDITED)
| 2010 |
|
2009 | |||||
|
|
|
|
|||||
|
Revenue from services
|
$ | 1,761,589 | $ | 1,552,696 | |||
|
Revenue from product
sales
|
74,788,711 | 78,416,778 | |||||
|
|
|
|
|
||||
|
Total revenue
|
76,550,300 | 79,969,474 | |||||
|
|
|
||||||
|
Cost of goods sold for
services
|
1,687,588 | 972,874 | |||||
|
Cost of goods sold for
product sales
|
67,493,739 | 72,483,157 | |||||
|
|
|
|
|
||||
|
Total cost of goods
sold
|
69,181,327 | 73,456,031 | |||||
|
Selling, general and
administrative expense
|
3,884,059 | 2,606,476 | |||||
|
|
|
|
|
||||
|
Income before other
income (expense)
|
3,484,914 | 3,906,967 | |||||
|
Other income (expense)
|
|
|
|||||
|
Interest
expense
|
(353,338 | ) | (350,589 | ) | |||
|
Interest
income
|
6,491 | 5,619 | |||||
|
Gain
on sale of assets
|
21,893 | 42,137 | |||||
|
Other
income (expense)
|
44,408 | (2,111 | ) | ||||
|
|
|
|
|
||||
| (280,546 | ) | (304,944 | ) | ||||
|
|
|
|
|
||||
|
Income before income
taxes
|
3,204,368 | 3,602,023 | |||||
|
Income tax provision
|
1,281,747 | 1,440,809 | |||||
|
|
|
|
|
||||
|
Net income
|
$ | 1,922,621 | $ | 2,161,214 | |||
|
|
|
|
|
||||
|
Basic earnings per share
|
$ | 0.28 | $ | 0.37 | |||
|
|
|
|
|
||||
|
Diluted earnings per
share
|
$ | 0.28 | $ | 0.37 | |||
|
|
|
|
|
||||
|
Weighted shares outstanding:
|
|
|
|||||
|
Basic
|
6,784,917 | 5,850,633 | |||||
|
|
|
|
|
||||
|
Diluted
|
6,835,480 | 5,864,585 | |||||
|
|
|
|
|
||||
See accompanying notes to consolidated financial statements.
INDUSTRIAL SERVICES OF AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009
(UNAUDITED)
| 2010 |
|
2009 | |||||
|
|
|
|
|||||
|
Revenue from services
|
$ | 4,831,239 | $ | 5,720,398 | |||
|
Revenue from product
sales
|
238,702,989 | 137,623,313 | |||||
|
|
|
|
|
||||
|
Total revenue
|
243,534,228 | 143,343,711 | |||||
|
Cost of goods sold for
services
|
4,474,040 | 4,388,861 | |||||
|
Cost of goods sold for
product sales
|
217,654,093 | 124,305,531 | |||||
|
|
|
|
|
||||
|
Total cost of goods
sold
|
222,128,133 | 128,694,392 | |||||
|
Selling, general and
administrative expense
|
10,649,352 | 7,756,020 | |||||
|
|
|
|
|
||||
|
Income before other
income (expense)
|
10,756,743 | 6,893,299 | |||||
|
Other income (expense)
|
|
|
|||||
|
Interest expense
|
(1,021,949 | ) | (702,255 | ) | |||
|
Interest income
|
23,798 | 27,779 | |||||
|
Gain on sale of assets
|
256,041 | 53,109 | |||||
|
Other income (expense)
|
40,509 | (42,787 | ) | ||||
|
|
|
|
|
||||
| (701,601 | ) | (664,154 | ) | ||||
|
|
|
|
|
||||
|
Income before income
taxes
|
10,055,142 | 6,229,145 | |||||
|
|
|
||||||
|
Income tax provision
|
4,022,057 | 2,491,658 | |||||
|
|
|
|
|
||||
|
Net income
|
$ | 6,033,085 | $ | 3,737,487 | |||
|
|
|
|
|
||||
|
Basic earnings per share
|
$ | 0.92 | $ | 0.67 | |||
|
|
|
|
|
||||
|
|
|
||||||
|
Diluted earnings per
share
|
$ | 0.91 | $ | 0.67 | |||
|
|
|
|
|
||||
|
Weighted shares outstanding:
|
|
|
|||||
|
Basic
|
6,566,879 | 5,565,593 | |||||
|
|
|
|
|
||||
|
Diluted
|
6,610,879 | 5,570,294 | |||||
|
|
|
|
|
||||
See accompanying notes to consolidated financial statements.
FINANCIAL INFORMATION
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
INDUSTRIAL SERVICES OF AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| September 30, 2010 (Unaudited) |
|
December 31, 2009 |
|||||
|
|
|
|
|||||
|
Current assets
|
|
|
|||||
|
Cash
and cash equivalents
|
$ | 2,068,705 | $ | 713,062 | |||
|
Accounts
receivable - trade (after allowance
for doubtful accounts of $100,000 in 2010 and in 2009) |
36,170,369 | 8,512,326 | |||||
|
Net
investment in sales-type leases
|
31,929 | 27,928 | |||||
|
Inventories
|
30,872,638 | 26,426,611 | |||||
|
Deferred
income taxes
|
538,045 | 538,045 | |||||
|
Other
|
428,974 | 322,847 | |||||
|
|
|
|
|
|
|||
|
Total
current assets
|
70,110,660 | 36,540,819 | |||||
|
Net property and equipment
|
26,447,146 | 26,994,539 | |||||
|
Other Assets
|
|
|
|||||
|
Goodwill
|
2,567,046 | 2,567,046 | |||||
|
Intangible
assets, net (Note 2)
|
6,712,500 | — | |||||
|
Net
investment in sales-type leases
|
48,827 | 73,300 | |||||
|
Notes
receivable – related party
|
98,773 | 129,079 | |||||
|
Other
assets
|
1,300,428 | 368,834 | |||||
|
|
|
|
|
||||
| 10,727,574 | 3,138,259 | ||||||
|
|
|
|
|
||||
| $ | 107,285,380 | $ | 66,673,617 | ||||
|
|
|
|
|
||||
|
Current liabilities
|
|
|
|||||
|
Current
maturities of long term debt (Note 4)
|
$ | 1,517,900 | $ | 12,539,889 | |||
|
Current
maturities of capital lease obligation
|
— | 20,798 | |||||
|
Accounts
payable
|
14,707,433 | 4,684,386 | |||||
|
Income
tax payable
|
2,235,879 | 517,828 | |||||
|
Note
payable to BB&T (Note 4)
|
— | 5,000,000 | |||||
|
Interest
rate swap agreement liability (Note 4)
|
781,094 | 564,715 | |||||
|
Accrued
bonuses
|
1,803,400 | 1,513,800 | |||||
|
Other
current liabilities
|
493,875 | 380,718 | |||||
|
|
|
|
|
|
|||
|
Total
current liabilities
|
21,539,581 | 25,222,134 | |||||
|
|
|
||||||
|
Long-term liabilities
|
|
|
|||||
|
Long-term
debt (Note 4)
|
47,542,491 | 16,654,481 | |||||
|
Other
liabilities (Note 10)
|
4,520,000 | — | |||||
|
Deferred
income taxes
|
3,150,622 | 2,879,509 | |||||
|
|
|
|
|
||||
| 55,213,113 | 19,533,990 | ||||||
|
Stockholders’ equity
|
|
|
|||||
|
Common
stock, $0.0033 par value, 10,000,000 shares authorized,
and 7,192,500 shares issued in 2010 and 2009, 6,784,917 and 6,429,438 shares outstanding in 2010 and 2009, respectively |
23,975 | 23,975 | |||||
|
Additional
paid-in capital
|
9,645,096 | 7,442,346 | |||||
|
Retained
earnings
|
21,918,899 | 15,885,814 | |||||
|
Accumulated
other comprehensive loss
|
(468,657 | ) | (338,829 | ) | |||
|
Treasury
stock, 407,583 and 763,062 shares at average cost
in 2010 and 2009, respectively |
(586,627 | ) | (1,095,813 | ) | |||
|
|
|
|
|
||||
| 30,532,686 | 21,917,493 | ||||||
|
|
|
|
|
||||
| $ | 107,285,380 | $ | 66,673,617 | ||||
|
|
|
|
|
||||
See accompanying notes to consolidated financial statements.
For more information, contact:
Industrial Services of America, Inc., Louisville
Harry Kletter, 502-366-3452
hklet@isa-inc.com.
or
Alan Schroering, 502-366-3452
aschroering@isa-inc.com.
www.isa-inc.com.
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