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Industrial Services of America Inc. Reports Operating Results (10-Q/A)

November 28, 2011 | About:
10qk

10qk

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Industrial Services of America Inc. (IDSA) filed Amended Quarterly Report for the period ended 2011-06-30.

Industrial Services Of America Inc. has a market cap of $39.42 million; its shares were traded at around $5.68 with a P/E ratio of 9.96 and P/S ratio of 0.11. Industrial Services Of America Inc. had an annual average earning growth of 38.5% over the past 5 years.

Highlight of Business Operations:

Total revenue increased $4.2 million or 2.5% to $171.2 million in 2011 compared to $167.0 million in 2010. Recycling revenue increased $4.5 million or 2.8% to $167.3 million in 2011 compared to $162.8 million in 2010. This is primarily due an increase in the volume of ferrous materials shipments of 20.8 thousand gross tons or 23.2%. Overall average price for all commodities shipped increased $11.88 per gross ton, or 1.2%, as well. In 2011, new dealer sales in the Recycling segment totaled $18.6 million, while lost dealer sales totaled only $5.3 million. These increases were partially offset by a decrease in the volume of stainless steel materials shipments of 31.3 million pounds, or 29.4%, due to a decrease in worldwide stainless steel demand in the second quarter. Substantially all of our stainless steel sales are to one customer. In response to the overall decrease in demand for stainless steel, this customer decreased sales orders in the second quarter. The volume of other nonferrous materials shipments also decreased by 0.5 million pounds, or 3.4%. Sales to existing Recycling segment dealers decreased by $6.5 million, or 4.2%. Waste Services revenue decreased $0.4 million or 8.5% to $3.8 million in 2011 compared to $4.2 million in 2010 primarily due to the loss of several large customers in the first and second quarters.

Selling, general and administrative expenses decreased $0.4 million or 6.1% to $6.4 million in the first six months of 2011 compared to $6.8 million in the same period in 2010. As a percentage of revenue, selling, general and administrative expenses were 3.7% in 2011 compared to 4.1% in 2010. The primary drivers of the decrease in total expenses were as follows:

Total revenue decreased $27.8 million or 30.0% to $65.0 million for the three month period ending June 30, 2011 as compared to $92.8 million during the same period in 2010. Recycling revenue decreased $27.6 million or 30.5% to $63.1 million during this period in 2011 compared to $90.7 million during the same period in 2010. This was primarily due to the drop in worldwide demand in stainless steel in the second quarter, causing a decrease of 32.3 million pounds, or 62.0%, in the volume of stainless steel materials shipments and a decrease of 0.7 million pounds, or 8.3%, in the volume of other nonferrous shipments. Overall average price for all commodities shipped decreased $128.62 per gross ton, or 13.1%. Substantially all of our stainless steel sales are to one customer. In response to the overall decrease in demand for stainless steel, this customer decreased sales orders in the second quarter. Overall sales to existing Recycling segment dealers decreased by $31.0 million, or 36.3%. This decrease was partially offset by an increase in the volume of ferrous shipments of 2.6 thousand gross tons, or 5.0%. New dealer sales in the Recycling segment totaled $9.1 million, while lost dealer sales totaled only $3.7 million. Waste Services revenue decreased $0.2 million or 9.7% to $1.9 million during the three month period ending June 30, 2011 as compared to $2.1 million during the same period in 2010 primarily due to the loss of several large customers in the first and second quarters.

Selling, general and administrative expenses decreased $1.0 million or 27.8% to $2.6 million in 2011 compared to $3.6 million in 2010. As a percentage of revenue, selling, general and administrative expenses were 4.0% in 2011 compared to 3.8% in 2010. The primary driver of the decrease in total expense was a decrease in labor, stock bonus and bonus expense of $1.2 million. This decrease was partially offset by an increase in depreciation and amortization expense of $0.2 million.

We used net cash from investing activities of $1.0 million and $1.3 million for the six month periods ended June 30, 2011 and 2010, respectively. In 2011, we used $0.2 million for road and building improvements. We purchased recycling and rental fleet equipment, shredder system equipment, and office equipment of $0.5 million. The rental fleet equipment consists of solid waste handling and recycling equipment such as compactors, waste edge monitors, and balers. It is our intention to continue to pursue this market. We also purchased two trucks for $0.2 million. We received $0.2 million from sales of our rental fleet compactors, balers, and containers. We paid deposits of $0.3 million on machinery and equipment.

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