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In a release on March 19, the company noted:
For the full fiscal year 2008, ISA expects earnings of between $0.40 and $0.45 per basic and diluted share on revenues of approximately $100 million. That compares with full-year 2007 earnings of $0.71 per share and revenues of $77.0 million.
After three profitable quarters in 2008, the Company said an expected fourth quarter operating loss of $0.29 to $0.34 per share and one-time charges after income tax of $0.37, which will result in a fourth quarter 2008 loss between $0.66 to $0.71 per basic and diluted share. The fourth quarter 2008 loss reflects three primary factors:
- an operating loss caused by much lower demand and lower prices for ISA recyclable commodities, a result of the slowdown of global economic activity
- an inventory write-down of approximately $1.2 million to revalue ferrous and non-ferrous inventories at the current lower market prices
- a $990,000 reserve for the previously announced settlement of a lawsuit
Reported fourth quarter 2007 earnings were $566,295, or $0.16 per share, on revenues of $21.6 million. The Company expects to report full-year 2008 and fourth quarter earnings on or about March 31, 2009.
"Due to the worldwide economic downturn, the demand for recycled products and commodities came to a standstill in the fourth quarter of 2008, and we responded by cutting overhead and reducing staff," said Brian Donaghy, President and COO of ISA. "While this trying time presented management many challenges, it also provided some real opportunities."
During the first quarter of 2009, ISA expanded into the stainless steel and high-temperature alloys recycling business by purchasing inventories from Ventures Metals, LLC, agreeing to lease its processing equipment and facilities on Campground Road in Louisville, KY and in Mobile, Ala., and hiring key executives to head up a new ISA Alloys division. Over 90% of the inventories acquired in the transaction have been sold and shipped.
By settling the lawsuit, ISA is re-gaining access to several acres of property and facilities at its Grade Lane headquarters. The area will host ISA's new stainless steel operations, allowing the company to consolidate ferrous and non-ferrous metals and stainless steel processing at its Grade Lane location. "We expect this consolidation will improve processing efficiencies and reduce unit costs," Donaghy said.
Industrial Services of America is a publicly traded company whose core business is buying, processing and marketing scrap metals and recyclable materials for domestic users and export markets.
((Comments on this story may be sent to newsdesk@closeupmedia.com))
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