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Industrial Services of America, Inc. Announces Revenue Increase and Improved Operating Performance

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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, 2018.

ISA reported a 17.6% revenue increase and a $1.5 million improvement in
net income for the six months ended June 30, 2018 compared to the same
period in 2017.

The Company reported a net income of $833 thousand for the six months
ended June 30, 2018 compared to a net loss of $648 thousand for the six
months ended June 30, 2017. Further, the Company reported Adjusted
EBITDA of $2.0 million during the six months ended June 30, 2018, which
marks a substantial improvement compared to Adjusted EBITDA of $907
thousand during the six months ended June 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 income of $797 thousand for the three months
ended June 30, 2018 compared to a net loss of $377 thousand for the
three months ended June 30, 2017. Further, the Company reported Adjusted
EBITDA of $1.1 million during the three months ended June 30, 2018,
which marks an improvement compared to Adjusted EBITDA of $411 thousand
during the three months ended June 30, 2017. This improvement in
operating performance was primarily 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.)

    Three months ended June 30,     Six months ended June 30,
2018     2017 2018     2017
(in thousands) (in thousands)
Revenue $ 16,600 $ 13,560 $ 31,257 $ 26,571
Net income (loss) $ 797 $ (377 ) $ 833 $ (648 )
Adjusted EBITDA $ 1,139 $ 411 $ 1,955 $ 907
 

Todd L. Phillips, Chief Executive Officer, President and Chief Financial
Officer of ISA, commented, "I am very pleased with our overall financial
performance during the first half of 2018, in particular the volumes and
margins associated with the Company's shredder."

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 Ended
June 30,

   

Six Months Ended
June 30,

2018     2017 2018     2017
(in thousands) (in thousands)
Reconciliation from net income (loss) to Adjusted EBITDA
Net income (loss) $ 797 $ (377 ) $ 833 $ (648 )
 
Depreciation and amortization 521 560 1,042 1,135
Share-based compensation expense 14 27 23 59
Interest expense, including loan fee amortization 282 202 524 385
Gain on sale of assets - - - (28 )
Gain on insurance proceeds (487 ) - (487 ) -
Other (income) expense, net - (1 ) - (3 )
Income tax provision   12     -     20     7  
 
Total net adjustments   342     788     1,122     1,555  
 
Adjusted EBITDA $ 1,139   $ 411   $ 1,955   $ 907  
 

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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