• Six months net income of $1,614,379
• Six months EPS of $0.44 per diluted share
• Second quarter net income of $821,299
• Second quarter EPS of $0.22 per diluted share

Industrial Services of America, Inc.(NASDAQ:IDSA), a leading provider of recyclable commodities and other materials, logistics management services, equipment and processes for waste, announced un-audited financial results for the second quarter ending June 30, 2007. A complete report is available in the Company’s Form 10-Q, which is available for review at the Securities and Exchange Commission web site, http://www.sec.gov/edgar/searchedgar/companysearch.html.

Net income increased 58% to $1,614,379 for the first six months of 2007, compared with $1,019,283 for the same period in 2006. Net income increased 36% to $821,299 for the second quarter of 2007, compared with $602,757 for the same period in 2006.

“With the release of our earnings for the second quarter of 2007, we are pleased to announce that we have now recorded seventeen consecutive profitable quarters,” said CEO Harry Kletter. “This sustained profitability continues to place us in a stronger financial position, allowing for greater flexibility to adjust to changing economic market conditions. Our goal is to remain dedicated to the recycling, management services, and equipment industry while sustaining steady growth at an acceptable profit, adding to the net worth of the Company, and providing positive returns for our stockholders.”

The ISA Recycling segment continued to flourish as recycling revenues increased 23% to $28,895,786 for the first six months of 2007, compared with $23,566,384 for the same period in 2006 primarily due to an increase in commodity prices. Recycling segment operating levels and shipments for the first six months of 2007 were up 2% compared to the first six months in 2006.

Six-month Financial Highlights:

• Total revenues for the first six months of 2007 were $37.4 million compared with total revenues for the first six months of 2006 of $32.2 million.
• Income before income taxes for the first six months of 2007 was $2,664,239 compared to $1,698,805 for the first six months of 2006.
• Net income for the first six months of 2007 was $1,614,379 (basic and diluted earnings of 44 cents per share) compared with net income of $1,019,283 (basic and diluted earnings of 29 cents per share) for the first six months of 2006.
• EBITDA for the first six months of 2007 was $3,694,734 compared with EBITDA of $2,658,607 for the first six months of 2006. (See the EBITDA reconciliation at the end of this release.)

Second quarter Financial Highlights:

• Total revenues for the second quarter of 2007 were $19.5 million compared with total revenues for the second quarter of 2006 of $17.7 million.
• Income before income taxes for the second quarter of 2007 was $1,362,471 compared to $1,004,594 for the second quarter of 2006.
• Net income for the second quarter of 2007 was $821,299 (basic and diluted earnings of 22 cents per share) compared with net income of $602,757 (basic and diluted earnings of 17 cents per share) for the second quarter of 2006.
• EBITDA for the second quarter of 2007 was $1,894,012 compared with EBITDA of $1,505,713 for the second quarter of 2006. (See the EBITDA reconciliation at the end of this release.)

Mr. Kletter said the industry outlook for the third quarter of 2007 remains positive, as nonferrous and ferrous commodity markets are up. ISA opened a satellite facility on July 2, in New Albany, Indiana for purchasing of scrap recycling material. The New Albany location strategically complements the Louisville location because of its close proximity. This is expected to add volume to our growing recycling facilities.

In addition, ISA has completed the purchase of shredding machinery that broadens the type of scrap that can be processed at its Louisville facility. The TSC 80 SXS shredding plant is expected to be completed and in operation in 2008, allowing ISA to make specialty shredder grades of materials for specific customers and to process heavy grades currently processed by shearing. ISA has begun taking steps to update operations to prepare for the shredder system.

About ISA

Industrial Services of America, Inc., is a Louisville, Ky.-based logistics management services company servicing commercial, industrial and logistics customers nationwide. Industrial Services of America, Inc. provides scrap processing, waste and recycling management services, and equipment sales and service. Industrial Services of America, Inc. also actively participates in international markets, exporting non-ferrous metals and other recyclable materials. Additional information 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 varying demand for waste managing systems, equipment and services, competitive pressures in the waste managing systems and equipment, competitive pressures in the waste managing business, loss of customers and fluctuations in the price of recycled materials. Further information on factors that could affect the Company's results is detailed in the Company's filings with the Securities and Exchange Commission. The Company undertakes no obligation to publicly release the results of any revisions to the forward-looking statements.

FINANCIAL RESULTS AND SUPPLEMENTAL FINANCIAL INFORMATION FOLLOW

INDUSTRIAL SERVICES OF AMERICA, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS SIX MONTHS ENDED JUNE 30, 2007 AND 2006 (UNAUDITED)
		2007					2006
Revenue from services		$	7,492,503				$	7,713,893
Revenue from product sales			29,940,342					24,472,761
Total Revenue			37,432,845					32,186,654
Cost of goods sold for services			6,927,882					7,171,613
Cost of goods sold for product sales			24,928,942					20,818,686
Reduction of cost of goods sold			(142,544	)				(300,000	)
Total Cost of goods sold			31,714,280					27,690,299
Selling, general and administrative expense			3,013,208					2,800,137
Income before other income (expense)			2,705,357					1,696,218
Other income (expense)
Interest expense			(113,852	)				(96,969	)
Interest income			61,764					64,576
Gain/(loss) on sale of assets			(11,388	)				24,926
Other income			22,358					10,054
			(41,118	)				2,587
Income before income taxes			2,664,239					1,698,805
Income tax provision			1,049,860					679,522
Net income		$	1,614,379				$	1,019,283
Basic earnings per share		$	0.44				$	0.29
Diluted earnings per share		$	0.44				$	0.29
Weighted shares outstanding:
Basic			3,640,899					3,567,639
Diluted			3,640,899					3,582,308

INDUSTRIAL SERVICES OF AMERICA, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS THREE MONTHS ENDED JUNE 30, 2007 AND 2006 (UNAUDITED)
		2007					2006
Revenue from services		$	3,648,276				$	3,768,974
Revenue from product sales			15,879,820					13,933,660
Total Revenue			19,528,096					17,702,634
Cost of goods sold for services			3,405,183					3,522,132
Cost of goods sold for product sales			13,174,595					11,872,693
Reduction of cost of goods sold			(107,266	)				(150,000	)
Total Cost of goods sold			16,472,512					15,244,825
Selling, general and administrative expense			1,649,201					1,450,284
Income before other income (expense)			1,406,383					1,007,525
Other income (expense)
Interest expense			(71,395	)				(69,584	)
Interest income			32,791					36,354
Gain/(loss) on sale of assets			(5,613	)				27,207
Other income			305					3,092
			(43,912	)				(2,931	)
Income before income taxes			1,362,471					1,004,594
Income tax provision			541,172					401,837
Net income		$	821,299				$	602,757
Basic earnings per share		$	0.22				$	0.17
Diluted earnings per share		$	0.22				$	0.17
Weighted shares outstanding:
Basic			3,640,899					3,574,306
Diluted			3,640,899					3,590,214

Industrial Services of America, Inc. Supplemental Financial Information
Reconciliation of EBITDA (1):
		Three months ending June 30,					Six Months ending June 30,
		2007		2006			2007		2006
Net Income		821,299		602,757			1,614,379		1,019,283
Interest expense		71,395		69,584			113,852		96,969
Income taxes		541,172		401,837			1,049,860		679,522
Depreciation		460,146		431,535			916,643		862,833
Amortization		-		-			-		-
EBITDA (1)		1,894,012		1,505,713			3,694,734		2,658,607
(1) EBITDA is calculated by the Company as net income before interest expense, income tax expense, depreciation and amortization. The Company uses EBITDA as a key performance measure of results of operations for purposes of evaluating performance internally. This non-GAAP measurement is not intended to replace the presentation of our financial results in accordance with GAAP. Rather, we believe the EBITDA calculation provides additional information to investors and debt holders due to the fact that tax credits, tax rates and other tax related items vary by company. Additionally, years of service for fixed assets and amortizable assets are based on company judgment. Finally, companies have several ways of raising capital which can affect interest expense. We believe the presentation of EBITDA provides a meaningful measure of performance exclusive of these unique items.

Industrial Services of America, Inc.
Harry Kletter, 502-366-3452
hklet@isa-inc.com
or
Alan Schroering, 502-366-3452
aschroering@isa-inc.com
http://www.isa-inc.com/

Source: Business Wire (August 8, 2007 - 4:06 PM EDT)

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