Industrial Services of America, Inc. Reports Second Quarter 2009 Results

For the second quarter ending June 30, 2009, net income was $922,210 ($.26 per basic and diluted share), compared with $1,662,632 ($.46 per basic and diluted share) in the second quarter ending June 30, 2008. Total revenues for the quarter were $39.1M compared to $34.5M in 2008.

For the first six months ending June 30, 2009, net income was $1,576,273 ($.44 per basic and diluted share), compared with $2,749,183 ($.76 per basic and diluted share) in the first six months ending June 30, 2008. Total revenues for the first six months were $63.4M compared to $60.6M in 2008.

In an environment where many businesses have continued to suffer, ISA delivered another solid financial performance in the second quarter of 2009. "As the economy and asset markets stabilized throughout the quarter, we saw improved commodity pricing and a solid pick-up in domestic consumer demand for scrap metals," said Harry Kletter, ISA's Chairman and Chief Executive Officer. Throughout the second quarter of 2009, ISA continued making important and strategic investments in its operational capabilities. ISA completed its shredder installations, fully integrated its stainless steel and alloys business into its recycling division and expanded its banking facilities. "Our fully operational and integrated recycling operations give us a great competitive footprint in our markets."

For the second quarter of fiscal 2009

-- Total revenues were $39.1 million, compared with $34.5 million in 2008.

-- Income before income taxes was $1,537,017 compared with $2,848,714 in 2008.

-- Earnings before interest, taxes, depreciation and amortization (EBITDA) for 2009 were $2,365,976, compared with EBITDA of $3,505,381 for 2008. (See attached reconciliation.)

-- Net income was $922,210 (basic and diluted earnings of $0.26 per share), compared with net income of $1,662,632 (basic and diluted earnings of $0.46 per share) in 2008. Basic and diluted weighted average shares outstanding were 3,651,896 in 2009 and 3,596,368 in 2008.

For the first six months of fiscal 2009

-- Total revenues were $63.4 million, compared with $60.6 million in 2008.

-- Income before income taxes was $2,627,122 compared with $4,659,632 in 2008.

-- Earnings before interest, taxes, depreciation and amortization (EBITDA) for 2009 were $4,208,212, compared with EBITDA of $5,929,201 for 2008. (See attached reconciliation.)

-- Net income was $1,576,273 (basic and diluted earnings of $0.44 per share), compared with net income of $2,749,183 (basic and diluted earnings of $0.76 per share) in 2008. Basic and diluted weighted average shares outstanding were 3,613,806 in 2009 and 3,607,120 in 2008.

ISA also recently announced that it has entered into an agreement to acquire two parcels of property adjacent to its facilities in Louisville, Kentucky from the Harry Kletter Family Partnership LLC. The transactions have been approved by the Audit Committee and the Board of Directors of the company. Mr. Harry Kletter, the Chairman of the Board and Chief Executive Officer of the Company, took no part in the Board's deliberations or decision due to his interest in the transaction. This transaction is scheduled to close in early September of 2009. This deal represents another step in ISA's long-term strategy to acquire key real property assets.

The Company's 2009 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, 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 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 the loss of customers. 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.

INDUSTRIAL SERVICES OF AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 2009 AND 2008
(UNAUDITED)
                                             2009                2008
Revenue from services                        $     1,522,134     $     4,011,256
Revenue from product sales                         37,602,180          30,499,829
Total Revenue                                      39,124,314          34,511,085
Cost of goods sold for services                    1,153,059           4,284,501
Cost of goods sold for product sales               33,820,184          24,536,188
Total Cost of goods sold                           34,973,243          28,820,689
Selling, general and administrative expense        2,439,883           2,876,234
Income before other income (expense)               1,711,188           2,814,162
Other income (expense)
Interest expense                                   (213,161   )        (135,003   )
Interest income                                    6,917               20,563
Gain on sale of assets                             7,222               21,623
Other income                                       24,851              127,369
                                                   174,171    )        34,552
Income before income taxes                         1,537,017           2,848,714
Income tax provision                               614,807             1,186,082
Net income                                   $     922,210       $     1,662,632
Basic earnings per share                     $     0.26          $     0.46
Diluted earnings per share                   $     0.26          $     0.46
Weighted shares outstanding:
Basic                                              3,651,896           3,596,368
Diluted                                            3,651,896           3,596,368

INDUSTRIAL SERVICES OF AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2009 AND 2008
(UNAUDITED)
                                             2009                2008
Revenue from services                        $     4,167,702     $     8,883,798
Revenue from product sales                         59,206,535          51,710,682
Total Revenue                                      63,374,237          60,594,480
Cost of goods sold for services                    3,415,987           8,267,428
Cost of goods sold for product sales               51,822,374          42,448,736
Total Cost of goods sold                           55,238,361          50,716,164
Selling, general and administrative expense        5,149,544           5,179,259
Income before other income (expense)               2,986,332           4,699,057
Other income (expense)
Interest expense                                   (351,666   )        (228,569   )
Interest income                                    22,160              43,997
Gain on sale of assets                             10,972              16,481
Other income (expense)                             (40,676    )        128,666
                                                   (359,210   )        (39,425    )
Income before income taxes                         2,627,122           4,659,632
Income tax provision                               1,050,849           1,910,449
Net income                                   $     1,576,273     $     2,749,183
Basic earnings per share                     $     0.44          $     0.76
Diluted earnings per share                   $     0.44          $     0.76
Weighted shares outstanding:
Basic                                              3,613,806           3,607,120
Diluted                                            3,613,806           3,607,120

Industrial Services of America, Inc.
Supplemental Financial Information
Reconciliation of EBITDA (1):
                  Three months ending June 30,  Six Months ending June 30,
                  2009       2008               2009       2008
Net Income        922,210    1,662,632          1,576,273  2,749,183
Interest expense  213,161    135,003            351,666    228,569
Income taxes      614,807    1,186,082          1,050,849  1,910,449
Depreciation      615,798    521,664            1,229,425  1,041,000
Amortization      -          -                  -          -
EBITDA (1)        2,365,976  3,505,381          4,208,212  5,929,201
(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.

SOURCE: Industrial Services of America, Inc.

Industrial Services of America, Inc., Louisville 
Harry Kletter or Alan Schroering, 502-366-3452 
hklet@isa-inc.com or aschroering@isa-inc.com 
http://www.isa-inc.com/