Industrial Services of America, Inc. Announces Third Quarter 2018 Financial Results and New Credit Facility
November 13 2018 - 8:40AM
Business Wire
Industrial Services of America, Inc. (NASDAQ: IDSA), (the
“Company” or “ISA”), a company that buys, processes and markets
ferrous and non-ferrous metals and other recyclable commodities,
and buys used autos in order to sell used auto parts, today
announced the filing with the U.S. Securities and Exchange
Commission of its Form 10-Q for the quarter ended September 30,
2018.
ISA reported a 15.9% revenue increase and a $1.2 million
improvement in net income for the nine months ended September 30,
2018 compared to the same period in 2017.
The Company reported net income of $356 thousand for the nine
months ended September 30, 2018 compared to a net loss of $825
thousand for the nine months ended September 30, 2017. Further, the
Company reported Adjusted EBITDA of $2.3 million during the
nine months ended September 30, 2018, which marks a substantial
improvement compared to Adjusted EBITDA of $1.6 million during
the nine months ended September 30, 2017. This improvement in
operating performance was due in part to the successful restart of
the Company's shredder in May 2017 as well as improvements in
the Company's ferrous volumes and margins from 2017 to 2018.
The restart of the Company's shredder led to favorable sales mix
and improved margins. Net income was further strengthened by a
non-recurring insurance settlement gain in the amount of
$487 thousand during the second quarter of 2018. This amount
is excluded from Adjusted EBITDA. (See Non-GAAP Measures
below.)
The Company reported a net loss of $477 thousand for the three
months ended September 30, 2018 compared to a net loss of $177
thousand for the three months ended September 30, 2017. Further,
the Company reported Adjusted EBITDA of $363 thousand
during the three months ended September 30, 2018 compared to
Adjusted EBITDA of $647 thousand during the three months ended
September 30, 2017. The Company's results were negatively
impacted during the third quarter of 2018 by recent global
political events, such as tariffs, trade wars and other global
economic events. Ferrous market prices and volumes were negatively
impacted by economic stress in Turkey, one of the largest importers
of United States ferrous scrap metal. Pricing and volumes were
further challenged by uncertainty created by tariffs and threatened
trade wars. Non-ferrous market prices and volumes were similarly
impacted by tariffs and threatened trade wars, as well as certain
restrictions placed by China on imported metals.
Three months ended September
30, Nine months ended September 30, 2018
2017 2018 2017 (in
thousands)
(in thousands)
Revenue $ 16,798 $ 14,909 $ 48,056 $
41,480 Net income (loss) $ (477 ) $ (177 ) $ 356 $ (825 ) Adjusted
EBITDA $ 363 $ 647 $ 2,319 $ 1,554
ISA announces that the Company refinanced its working
capital line of credit with a new $10.0 million revolving line of
credit and a $2.5 million term loan. The interest rate on the
Revolving Loan is equal to LIBOR plus 2.25% to 2.75% depending on
financial performance. The interest rate on the Term Loan is equal
to LIBOR plus 2.75% to 3.25% depending on financial
performance.
Todd L. Phillips, Chief Executive Officer, President and
Chief Financial Officer of ISA, commented, “We are very excited
to work with Bank of America with our new credit
facility."
Non-GAAP Measures
The information provided above in this release includes certain
non-GAAP financial measures as defined under SEC rules. In
accordance with SEC rules, the Company has provided, in the
supplemental information below, a reconciliation of those measures
to the most directly comparable GAAP measures. To provide
additional information regarding the Company's results, the Company
has disclosed in this press release Adjusted EBITDA. Adjusted
EBITDA is not a measure of financial performance under accounting
principles generally accepted in the United States of America. The
Company defines Adjusted EBITDA as net income (loss) excluding
depreciation and amortization, share-based compensation expense,
interest expense, including loan fee amortization, gain on sale of
assets, gain on insurance proceeds, other income (expense), net,
and income tax provision. The Company has included Adjusted EBITDA
as a supplemental financial measure in this press release as it is
a key measure used by management and the board of directors to
understand and evaluate the core operating performance of the
Company, to prepare budgets and operating plans, and because
management believes such measure provides useful information in
understanding and evaluating the Company's operating results.
Adjusted EBITDA is also used in certain covenants contained in the
Company’s credit agreement. However, use of Adjusted EBITDA as an
analytic tool has its limitations and you should not consider this
measure in isolation or as a substitute for analysis of the
Company's financial results as reported under GAAP, including net
income (loss), gross profit, cash flows from operating, investing
or financing activities, or any other measure calculated in
accordance with GAAP. The following table presents the
reconciliation between net income (loss) and Adjusted EBITDA.
Three Months EndedSeptember
30,
Nine Months EndedSeptember
30,
2018 2017 2018
2017 (in thousands) (in thousands)
Reconciliation from net income (loss) to Adjusted EBITDA
Net income (loss) $ (477 ) $ (177 ) $ 356 $
(825 ) Depreciation and amortization 529 534 1,571 1,669
Share-based compensation expense 41 31 64 90 Interest expense,
including loan fee amortization 292 240 817 625 Gain on sale of
assets - - - (28 ) Gain on insurance proceeds - - (487 ) - Other
(income) expense, net (15 ) 17 (15 ) 14 Income tax provision
(7 ) 2 13 9 Total
net adjustments 840 824 1,963
2,379 Adjusted EBITDA $ 363 $
647 $ 2,319 $ 1,554
About ISA
Headquartered in Louisville, Kentucky, Industrial Services of
America, Inc., is a publicly traded company that buys, processes
and markets ferrous and non-ferrous metals and other recyclable
commodities, and buys used autos in order to sell used auto parts.
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 commodity prices, varying demand for metal recycling,
competitive pressures in metal recycling markets, the failure to
operate the shredder successfully, competitive pressures in the
used auto parts market, availability of liquidity 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. Except as required by law, ISA undertakes no
obligation to publicly release the results of any revisions to the
forward-looking statements.
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.
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version on businesswire.com: https://www.businesswire.com/news/home/20181113005723/en/
Industrial Services of America, Inc.Todd Phillips,
502-366-3452Chief Executive Officer, President and Chief Financial
Officer
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