FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From to
-------- ----------
Commission File Number 0-20979
INDUSTRIAL SERVICES OF AMERICA, INC.
------------------------------------
(Exact Name of Registrant as specified in its Charter)
Florida 59-0712746
------- ----------
(State or other jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
7100 Grade Lane, PO Box 32428
Louisville, Kentucky 40232
(Address of principal executive offices)
(502) 368-1661
(Registrant's Telephone Number, Including Area Code)
Check whether the registrant (1) has filed all Reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past
90 days. YES X NO
----- -----
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of June 30, 2000: 1,929,600.
INDUSTRIAL SERVICES OF AMERICA, INC. AND SUBSIDIARY
INDEX
Page No.
Part I Financial Information
Report of Independent Accountants 3
Condensed Consolidated Balance Sheet
March 31, 2000 and December 31, 1999 4
Condensed Consolidated Statement of
Operations Three months ended
June 30, 2000 and 1999 6
Condensed Consolidated Statement of
Operations Six months ended
June 30, 2000 and 1999 7
Condensed Consolidated Statement of
Cash Flows Six months ended
June 30, 2000 and 1999 8
Notes to Condensed Consolidated
Financial Statements 9
Management's Discussion and Analysis
of Financial Condition and Results
of Operations 11
Part II Other Information
Item 4 15
Item 5 16
Item 6 16
2
REPORT OF INDEPENDENT ACCOUNTANTS
Board of Directors and Shareholders
Industrial Services of America, Inc. and Subsidiary
Louisville, Kentucky
We have reviewed the condensed consolidated balance sheet of
Industrial Services of America, Inc. as of June 30, 2000 and the
related condensed consolidated statements of income and cash
flows for the three month and six month periods ended June 30,
2000 and 1999. These financial statements are the responsibility
of the Company's management.
We conducted our review in accordance with standards established
by the AICPA. A review of interim financial information consists
principally of applying analytical procedures to financial data
and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an
audit conducted in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion
regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material
modifications that should be made to the accompanying condensed
consolidated financial statements for them to be in conformity
with generally accepted accounting principles.
Crowe, Chizek and Company LLP
Indianapolis, Indiana
July 26, 2000
3
PART I - FINANCIAL INFORMATION
ITEM 1: CONSOLIDATED FINANCIAL STATEMENTS
INDUSTRIAL SERVICES OF AMERICA, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
ASSETS
------
<TABLE>
<CAPTION>
June 30, December 31,
-------- ------------
2000 1999
---- ----
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 1,826,990 $ 2,388,811
Accounts receivable - trade (after
allowance for doubtful accounts of
$266,980 in 2000 and $190,000 in 1999) 8,979,267 8,750,674
Accounts receivable - related parties 11,028
Net investment in sales type leases 90,321 96,864
Inventories 2,295,087 2,185,994
Deferred income taxes 136,700 89,300
Other 217,232 143,327
----------- -----------
Total current assets 13,545,597 13,665,998
Net property and equipment 5,228,696 5,409,046
Other Assets
Non-compete agreements, net 507,066 608,248
Intangibles (net of accumulated
amortization of $159,997 and
$133,333 in 2000 and 1999, respectively) 640,002 666,668
Net investment in sales-type leases 388,996 121,676
Other Assets 30,284 43,859
----------- -----------
1,566,348 1,440,451
----------- -----------
$20,340,641 $20,515,495
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
4
INDUSTRIAL SERVICES OF AMERICA, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
CONTINUED
(UNAUDITED)
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
June 30, December 31,
-------- ------------
2000 1999
---- ----
<S> <C> <C>
CURRENT LIABILITIES
Current maturities of long-term debt 403,596 397,502
Accounts payable 13,411,980 13,722,878
Income tax payable 132,991 131,867
Other current liabilities 137,608 175,273
----------- -----------
Total current liabilities 14,086,175 14,427,520
Long-term liabilities
Long-term debt 1,909,982 2,104,929
Deferred income taxes 37,900 157,800
----------- -----------
1,947,882 2,262,729
STOCKHOLDERS' EQUITY
Common stock, $.01 par value,
10,000,000 shares authorized
1,957,500 shares issued and 1,929,600
shares outstanding 19,575 19,575
Additional paid-in capital 1,851,247 1,669,963
Retained earnings 2,443,762 2,143,708
Treasury stock, at cost, 27,900 shares (8,000) (8,000)
----------- -----------
Total stockholders' equity 4,306,584 3,825,246
----------- -----------
$20,340,641 $20,515,495
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
5
INDUSTRIAL SERVICES OF AMERICA, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
REVENUE
Recycling $ 6,485,229 $ 4,689,890
Equipment sales, service and leasing 613,859 690,267
Management services 16,860,126 14,068,950
----------- -----------
Total revenue 23,959,214 19,449,107
Cost of goods sold
Recycling 6,281,222 4,101,479
Equipment sales, service and leasing 347,182 473,397
Management services 15,669,074 13,397,830
----------- -----------
Total cost of sales 22,297,478 17,972,706
----------- -----------
GROSS MARGIN 1,661,736 1,476,401
Selling, general and administrative 1,438,391 1,279,002
----------- -----------
INCOME FROM OPERATIONS 223,345 197,399
Other income (expense) 6,961 (77,218)
----------- -----------
Income before income taxes 230,306 120,181
Provision for income taxes 67,523 34,600
----------- -----------
NET INCOME $ 162,783 $ 85,581
=========== ===========
Earnings per share $0.08 $0.04
===== =====
Earnings per share, assuming dilution $0.08 $0.04
===== =====
</TABLE>
See accompanying notes to consolidated financial statements.
6
INDUSTRIAL SERVICES OF AMERICA, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
REVENUE
Recycling $12,868,298 $ 9,005,552
Equipment sales, service and leasing 1,228,664 1,220,122
Management services 29,690,025 26,290,165
----------- -----------
Total revenue 43,786,987 36,515,839
Cost of goods sold
Recycling 11,919,600 7,739,163
Equipment sales, service and leasing 782,299 831,592
Management services 27,794,228 24,824,011
----------- -----------
Total cost of sales 40,496,127 33,394,766
----------- -----------
GROSS MARGIN 3,290,860 3,121,073
Selling, general and administrative 2,855,744 2,623,470
----------- -----------
INCOME FROM OPERATIONS 435,116 497,603
Other expenses (10,638) (136,203)
----------- -----------
Income before income taxes 424,478 361,400
Provision for income taxes 124,424 140,900
----------- -----------
NET INCOME $ 300,054 $ 220,500
=========== ===========
Earnings per share $0.16 $0.11
===== =====
Earnings per share, assuming dilution $0.16 $0.11
===== =====
</TABLE>
See accompanying notes to consolidated financial statements.
7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
OPERATING ACTIVITIES
Net Income $ 300,054 $ 220,500
Adjustments to reconcile net income to
net cash from operating activities:
Stock options granted for services 40,404 40,404
Depreciation and amortization 729,150 690,799
Loss from sale of property and equipment 23,500
Provision for doubtful accounts 120,000 23,060
Deferred income taxes (167,300) 140,900
Change in assets and liabilities
Receivables (424,443) (1,544,408)
Inventories (109,093) 902,885
Other assets (49,302) 96,985
Accounts payable (233,924) 2,400,743
Other current liabilities (37,665) 133,388
----------- -----------
Net cash from operating activities 191,381 3,105,256
INVESTING ACTIVITIES
Proceeds from sale of property
and equipment 7,500
Purchases of property and equipment (451,952) (1,075,539)
Purchase of equipment under sales-type lease (287,874)
Proceeds from sales of sales-type leases 27,097
----------- -----------
Net cash from investing activities (705,229) (1,075,539)
FINANCING ACTIVITIES
Proceeds from capital contribution 140,880
Payments on note payable to bank (1,850,000)
Payments on long-term debt (188,853) (218,767)
----------- -----------
Net cash from financing activities (47,973) (2,068,767)
Net decrease in cash (561,821) (39,050)
Cash beginning of period 2,388,811 1,014,068
----------- -----------
CASH AT END OF PERIOD $ 1,826,990 $ 975,018
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
8
INDUSTRIAL SERVICES OF AMERICA, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have
been prepared in accordance with generally accepted accounting
principles for interim financial reporting. They do not include
all information and footnotes required by generally accepted
accounting principles for complete consolidated financial
statements. The information furnished includes all adjustments
which are, in the opinion of management, necessary to present
fairly the Registrant's financial position as of June 30, 2000
and the results of its operations and changes in cash flows for
the periods ended June 30, 2000 and 1999. Results of operations
for the period ended June 30, 2000 are not necessarily indicative
of the results that may be expected for the entire year.
Additional information, including the audited 1999 consolidated
financial statements and the Summary of Significant Accounting
Policies, is included in the Registrant's Annual Report on Form
10-K for the year ended December 31, 1999 on file with the
Securities and Exchange Commission.
2. SEGMENT INFORMATION
The Company's operations include three primary segments: ISA
Recycling, Computerized Waste Systems (CWS), and Waste Equipment
Sales & Service (WESSCO). ISA recycling provides products and
services to meet the needs of its customers related to ferrous,
non-ferrous and fiber recycling at two locations in the Midwest.
CWS provides waste disposal services including contract
negotiations with vendors, centralized billing, invoice auditing,
and centralized dispatching. WESSCO sells, leases, and services
waste handling and recycling equipment.
The Company's three reportable segments are determined by the
products and services that each offers. The recycling segment
generates its revenues based on buying and selling of ferrous and
non-ferrous scrap, CWS's revenues consist of management fees
charged to customers at a percentage of the total service
provided, and WESSCO sales and lease income comprise the primary
source of revenue for this segment.
The Company evaluates segment performance based on profit or loss
before income taxes and the evaluation process for each segment
includes only direct expenses omitting any selling, general and
administrative costs.
9
<TABLE>
<CAPTION>
WASTE
COMPUTERIZED EQUIPMENT
For the six months ending ISA WASTE SALES & SEGMENT
JUNE 30, 2000 RECYCLING SYSTEMS SERVICES TOTALS
------------- --------- ------- -------- ------
<S> <C> <C> <C> <C>
Recycling revenues $12,868,298 $12,868,298
Equipment sales, service
and leasing revenues 1,228,664 1,228,664
Management fees 29,690,025 29,690,025
Cost of goods sold (11,919,600) (27,794,228) (782,299) (40,496,127)
----------- ----------- ---------- -----------
SEGMENT PROFIT $ 948,698 $ 1,895,797 $ 446,365 $ 3,290,860
=========== =========== ========== ===========
</TABLE>
<TABLE>
<CAPTION>
WASTE
COMPUTERIZED EQUIPMENT
For the six months ending ISA WASTE SALES & SEGMENT
JUNE 30, 1999 RECYCLING SYSTEMS SERVICES TOTALS
------------- --------- ------- -------- ------
<S> <C> <C> <C> <C>
Recycling revenues $ 9,005,552 $ 9,005,552
Equipment sales, service and
leasing revenues 1,220,122 1,220,122
Management fees 26,290,165 26,290,165
Cost of goods sold (7,739,163) (24,824,011)
(831,592) (33,394,766)
----------- ----------- ---------- -----------
SEGMENT PROFIT $ 1,266,389 $ 1,466,154 $ 388,530 $ 3,121,073
=========== =========== ========== ===========
</TABLE>
3. INVENTORIES
Inventories consist of the following:
June 30, December 31,
2000 1999
---- ----
Equipment and parts $ 63,468 $ 86,647
Ferrous materials 1,217,339 1,200,868
Non-ferrous materials 1,014,280 898,479
----------- -----------
Total inventories $ 2,295,087 $ 2,185,994
----------- -----------
10
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
THIS REPORT ON FORM 10-Q CONTAINS STATEMENTS WHICH COULD BE
CONSIDERED FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND ARE SUBJECT
TO RISKS AND UNCERTAINTIES THAT INCLUDE VARYING DEMAND FOR WASTE
MANAGEMENT SYSTEMS AND EQUIPMENT, COMPETITIVE PRESSURES IN THE
WASTE MANAGEMENT BUSINESS, AND FLUCTUATIONS IN THE PRICE OF
RECYCLED MATERIALS. FURTHER INFORMATION ON FACTORS THAT COULD
AFFECT THE REGISTRANT'S RESULTS IS DETAILED IN THE REGISTRANT'S
FORM 10-K FILING FOR THE YEAR ENDED DECEMBER 31, 1999, WITH THE
SECURITIES AND EXCHANGE COMMISSION. THE REGISTRANT UNDERTAKES NO
OBLIGATION TO PUBLICLY RELEASE THE RESULTS OF ANY REVISIONS TO
THESE FORWARD-LOOKING STATEMENTS.
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 2000 the Registrant held cash and cash
equivalents of $1,826,990.
The Registrant derives its revenues from several sources,
including management services, equipment sales and leasing and
from its recycling operations. Management services comprised
approximately 67.8% and 72.0% of the Registrant's total revenues
for the six months ended June 30, 2000 and 1999, respectively.
The Registrant currently maintains a working capital line of
credit with the Mid-America Bank of Louisville and Trust Company
(the "Bank") in the amount of $2,000,000. Outstanding principal
under this credit facility bears interest at the Bank's prime
rate and the line matured in June 2000. At June 30, 2000 there
was nothing drawn against this line of credit.
RESULTS OF OPERATIONS
The following table presents, for the periods indicated, the
percentage relationship which certain captioned items in the
Registrant's Statements of Operations bear to total revenues and
other pertinent data:
Six Months ended June 30,
2000 1999
---- ----
Statements of Operations Data:
Total Revenue .......................... 100.0% 100.0%
Cost of goods sold ..................... 92.5% 91.5%
Selling, general and administrative
expenses ............................. 6.5% 7.2%
Income from operations ................. 1.0% 1.3%
SIX MONTHS ENDED JUNE 30, 2000 COMPARED TO SIX MONTHS ENDED JUNE
30, 1999
Total revenue increased 19.9% from $36,515,839 in 1999 to
$43,786,987 in 2000. CWS sales increased 12.9% from $26,290,165
in 1999 to $29,690,025 in 2000. Revenue in the recycling segment
increased 42.9% from $9,005,552 in 1999 to $12,868,298 in 2000.
This
11
increase is attributed to an increase in the tonnage of ferrous
commodities shipped of 17.0% and non-ferrous pounds shipped of
14.1%. Combined with this, the average selling price per ton in
the ferrous market increased 25.0% and the selling price of non-
ferrous items increased by 26.8%. Revenue in the equipment sales
and leasing segment had a minimal increase of $8,542 from the
second quarter of 2000 compared to the second quarter of 1999.
The 2000 total cost of sales was $40,496,127 increasing
$7,101,361 or 21.3% compared to 1999. The cost of goods sold in
management services increased 12.0% which reflects the revenue
increase of 12.9%. Cost of sales in the equipment sales and
leasing segment decreased 5.9% as the mix of rentals versus
equipment sales increased over last year. Cost of sales in the
recycling segment increased 54.0% from $7,739,163 to $11,919,600
due to increased shipments and higher purchasing costs. Average
purchase prices in the ferrous market increased approximately 38%
while the average prices in the non-ferrous market increased
approximately 28%.
The gross margin was $3,290,860 representing an increase of
$169,787 or a 5.4% increase from 1999. The gross margin was 7.5%
of revenue, which was 1.1% lower than 1999. The gross margin in
management services was 6.4% in the first six months of 2000
versus 5.6% in 1999. Gross profit in the recycling segment was
7.4% in the six months of 2000 versus 14.1% in the first six
months of 1999. Purchase prices of commodities rose at a faster
rate than the selling prices due to fixed contracts. For example
average ferrous purchases in the current six month period
increased approximately 35% while the average selling price per
ton only increased by approximately 25% as compared to the same
six month period last year.
Selling, general and administrative expenses increased 8.9%
from $2,623,470 in 1999 to $2,855,744 in 2000, and as a
percentage to sales, decreased from 7.2% to 6.5%. Expenses
remain controlled as a percentage of revenue. During the six
month period ended June 30, 2000, $331,350 in one-time and non-
recurring charges were incurred for separation agreements,
restructuring charges and professional/legal fees. Without this
one-time charge, selling, general and administrative expenses
would have been $2,524,394 or a 3.8% decrease from the prior year
six month period.
Net profit after taxes recorded for the first six months is
$300,054 or a 36.1% increase from the $220,500 reported for the
first six months of last year.
QUARTER ENDED JUNE 30, 2000 COMPARED TO QUARTER ENDED JUNE 30,
1999
Total revenue increased 23.2% from $19,449,107 in 1999 to
$23,959,214 in 2000. CWS sales increased 19.8% from $14,068,950
in 1999 to $16,860,126 in 2000. Commodity prices have rebounded
since the second quarter of 1999 and ferrous shipments and non-
ferrous shipments have increased causing an increase in recycling
revenues of 38.3% from $4,689,890 in 1999 to $6,485,229 in 2000.
Revenue in the equipment sales and leasing segment decreased
$76,408 or 11.1% from second quarter this year compared to the
second quarter last year.
The 2000 total cost of sales was $22,297,478 increasing
$4,324,772 or 24.1% compared to 1999. The cost of goods sold in
management services increased 17.0% which is proportional
12
to the revenue increase from management fees and cardboard
revenue. Cost of sales in the equipment sales and leasing
segment decreased 26.7% on decreased revenue of 11.1% as the mix
of rentals outpaced the increase in equipment sales.
The gross margin was $1,661,736 representing an increase of
$185,335 or a 12.6% increase from 1999. The gross margin was
6.9% of revenue, which was 0.7% lower than 1999 as a percentage
to revenue. The gross margin in management services was 7.1% in
the second quarter of 2000 versus 4.8% in 1999 which is a direct
result of the increased revenue from cardboard proceeds. Gross
profit in the recycling segment was 3.2% in the second quarter of
2000 versus 12.5% in the second quarter of 1999. In this segment
the three main products that are recycled include ferrous, non-
ferrous and fiber. Gross margins fluctuate depending upon the
revenue mix. Revenues increased in the ferrous and non-ferrous
markets 14.1% and 20.0% respectively from the second quarter of
1999 to the second quarter of 2000. The gross margin of ferrous
items is higher than non-ferrous items causing total gross margin
as a percentage to decrease, as the lower gross margin products
comprised more of the revenue growth. Purchase prices of
commodities also rose at a faster pace than selling prices in the
second quarter. Management is aware of the declining gross
profit levels in the second quarter and is being more aggressive
with purchases and selling prices.
Selling, general and administrative expenses increased 12.5%
from $1,279,002 in 1999 to $1,438,391 in 2000, and as a
percentage to sales, decreased from 6.6% to 6.0%. Expenses
remain controlled as a percentage of revenue and many of the
costs of operation have remained somewhat fixed even though the
revenue results have increased. The Registrant incurred a one-
time charge in the amount of $331,350 for separation agreements,
restructuring charges and legal/professional fees. A non-
material charge was taken in the first quarter of 2000 in the
amount of $25,000 while the remaining $306,350 was expensed in
the second quarter. Without this charge, expenses would have
been 11.5% less than the second quarter of the prior year.
Net profit after taxes for the second quarter is $162,783 or
a 90.2% improvement compared to the $85,581 net profit reported
in the second quarter of 1999.
FINANCIAL CONDITION AT JUNE 30, 2000 COMPARED TO DECEMBER 31,
1999
Accounts receivable-trade after allowances for bad debt
increased 2.6% or $228,593 during the first two quarters of 2000
due to the strong increase in revenues during the past six
months. The Registrant continues to focus on collections of past
due receivables and current outstanding accounts.
Accounts payable-trade decreased $310,898 or 2.3% as a
result of the Registrant's efforts to turn vendor invoices at a
faster rate.
From December 31, 1999 to June 30, 2000, the Registrant's
working capital increased by $220,944 to a deficit of $540,578
from the deficit of $761,522. The primary reason for the increase
is due to the decrease in accounts payable of $310,898 as total
current assets only decreased by $120,401 from December 31, 1999
to June 30, 2000. The Registrant's management will be focused on
working capital during the remainder of the fiscal year. Surplus
13
inventories will be shipped and the Registrant intends to examine
its purchases carefully to reduce inventory by year-end. The
Registrant continues to improve upon expense controls to provide
operational efficiencies and customer service.
14
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) At the Annual Meeting of Shareholders held on May
25, 2000, the following proposals were adopted by
the margins indicated:
(b) PROPOSAL 1: Annual Election of Directors. The
nominees for election as directors were Harry
Kletter, Joseph H. Cohen, Ted L. Cox, Barry N.
Naft, Roberta Kletter, Jerrold R. Perchik and Alan
L. Schroering. Two additional nominees were
nominated from the floor: Robert T. Otis and
Bruce Cannon. The seven director positions were
filled based upon the seven receiving the most
votes:
BROKER NON-
VOTES AND
FOR AGAINST ABSTENTIONS
--- ------- -----------
Harry Kletter 1,659,491 72,862 197,247
Joseph H. Cohen 1,731,353 1,000 197,247
Ted L. Cox 1,731,353 1,000 197,247
Jerrold R. Perchik 1,661,653 70,700 197,247
Alan L. Schroering 1,661,653 70,700 197,247
Robert T. Otis 960,304 * *
Bruce Cannon 960,304 * *
Barry N. Naft 713,553 59,496 1,156,551
Roberta Kletter 699,249 72,800 1,157,551
*N/A as nominated from the floor.
(c) PROPOSAL 2: Confirmation of Crowe Chizek &
Company LLP as the Company's independent auditors.
BROKER NON-VOTES
FOR AGAINST AND ABSTENTIONS
--- ------- ---------------
1,702,753 6,200 220,647
15
ITEM 5. OTHER INFORMATION
(a) During the second quarter of 2000, the Registrant
formed iR2 Solutions, a new division created to
capitalize on e-business opportunities and deliver
information technology solutions to the waste and
recycling industry. The new division will be
managed by Michael B. Friedman, Vice President of
Marketing, and W. Bruce Burton, Vice-President of
Information Technology. Dennis McDonough joined
the Company as iR2 Solutions Manager of
Information Systems. McDonough will focus on the
expansion and development of the Registrant's
information technology. His primary
responsibility includes enhancement to the
Registrant's Computerized Waste Systems software
and leading the information technology consulting
group.
The Registrant promoted three individuals as
follows: Timothy W. Myers to Chief Operating
Officer, Steve Singer to Vice-President Recycling,
and Charles Hulsman to Vice-President of
Computerized Waste Systems (CWS).
During August 2000, the Registrant's Board of
Directors approved a new dividend policy. The
dividend policy was changed to allow for the
declaration of cash dividends, subject to board
approval. Previously, all earnings were
reinvested in the business.
During August 2000, the Registrant's Board of
Directors also approved a stock repurchase
program. The stock repurchase program allows for
the purchase of up to 200,000 shares of the
Registrant's common stock at current market
prices. The Company may discontinue the program
at any time.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
The Registrant filed a report on Form 8-K on April
28, 2000 relating to the resignation of Sean
Garber as President and Chief Operating Officer.
16
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
INDUSTRIAL SERVICES OF AMERICA, INC.
DATE: August 11, 2000 /s/ Harry Kletter
---------------------------------------
Chairman and Chief Executive Officer
(Principal Executive and Financial
Officer)
17
