Industrial Services of America, Inc. Announces Substantial Improvement in Financial Performance

LOUISVILLE, Ky.–(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 June 30, 2017.

The Company reported a net loss of $648 thousand for the six months
ended June 30, 2017 compared to a net loss of $2,052 thousand for the
six months ended June 30, 2016. Further, the Company reported positive
Adjusted EBITDA of $907 thousand during the six months ended June 30,
2017, which marks a substantial improvement compared to the Adjusted
EBITDA loss of $397 thousand during the six months ended June 30, 2016.
This improvement in operating performance was due in part to the
successful start-up of the Company’s auto shredder and largely due to
improvements in pricing and volumes in the scrap metal commodity markets
from 2016 to 2017.

The Company reported a net loss of $377 thousand for the three months
ended June 30, 2017 compared to a net loss of $627 thousand for the
three months ended June 30, 2016. Further, the Company reported positive
Adjusted EBITDA of $411 thousand during the three months ended June 30,
2017, which marks an improvement compared to the positive Adjusted
EBITDA of $293 thousand during the three months ended June 30, 2016.
This improvement in operating performance was primarily due to the
successful start-up of the Company’s auto shredder as well as
improvements in pricing and volumes in the scrap metal commodity markets
from 2016 to 2017.

Todd Phillips, President and Chief Financial Officer of ISA commented,
“We restarted the Company’s auto shredder in late May and are very
pleased with the initial financial results from the shredder.
Additionally, Adjusted EBITDA for the three months ended June 30, 2017
as compared to the same period for 2016 improved by 40% despite costs
associated with the shredder start up and the limited time period in
which the shredder operated.”

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, and 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 loss and Adjusted EBITDA.

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.

Contacts

Industrial Services of America, Inc.
Todd Phillips, 502-366-3452
President
and Chief Financial Officer