Industrial Services of America Inc – ‘10KSB’ for 12/31/95

As of:  Monday, 4/1/96   ·   For:  12/31/95   ·   Accession #:  892303-96-6   ·   File #:  2-31610

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Annual Report — Small Business   —   Form 10-KSB
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10KSB       1995 10-K Industrial Services of America, Inc.        79    244K 
 2: EX-27       Financial Data Schedule (Pre-XBRL)                     1      6K 

10KSB   —   1995 10-K Industrial Services of America, Inc.
Document Table of Contents

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FORM 10-KSB                     
SECURITIES AND EXCHANGE COMMISSION                    
Washington, D.C. 20549                    

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d)                   
OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]       
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995                 

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15 (d)                     
OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE              
REQUIRED]                                                   

For the transition period from            to                
                         ---------    --------
Commission File No.: 2-31610                

INDUSTRIAL SERVICES OF AMERICA, INC.                
------------------------------------                
(Name of small business issuer in its charter)                

Florida                              59-0172746       
----------------------------                  -------------               
(State or other jurisdiction                  (IRS Employer               
of incorporation or organization)             Identification No.)               

7100 Grade Lane, P. 0. Box 32428, Louisville, Kentucky 40232                
------------------------------------------------------------                
(Address of principal executive offices)                

Registrant's telephone number, including area code:                             
(502) 368-1661                                                                  
--------------                                                                  

Securities registered under Section 12(b) of the Exchange Act:                  
None                                                                            

Securities registered under Section 12(g) of the Exchange Act:                  
None                                                                            

Check whether the Registrant (1) filed all reports required to be               
filed by Section 13 or 15(d) of the Securities Exchange Act of                  
1934 during the past 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                                    
-----      -----                          

Check if there is no disclosure of delinquent filers in response                
to Item 405 of Regulation S-B contained in this form, and no                    
disclosure will be contained, to the best of registrant's                       
knowledge, in definitive proxy or information statements                        
incorporated by reference in Part III of this Form 10-KSB or any                
amendment to this Form 10-KSB.  [ X ]                                           

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State issuer's revenues for its most recent fiscal year:                        
$30,545,142.                                                                    
-----------                                                                     

The aggregate market value of the voting stock held by non-                     
affiliates of the Registrant is $4,495,725 as of March 27, 1996.                
The number of outstanding shares of the Registrant's common stock               
is 1,729,600 shares as of March 27, 1996.                                       

Check whether the issuer filed all documents and reports required               
to be filed by Section 12, 13 or 15(d) of the Exchange Act after                
the distribution of securities under a plan confirmed by a court.               

Yes   X     No                          
-----      -----                

State the number of shares outstanding of each of the issuer's                  
classes of common equity, as of the latest practicable date:                    

Common Stock ($.01 Par Value) - 1,729,600 as of March 27, 1996                
--------------------------------------------------------------                

Transitional Small Business Disclosure Format (check one):                      

Yes         No   X                      
-----      -----                

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PART I                    

ITEM 1.   DESCRIPTION OF BUSINESS                                               
-------   -----------------------                                               

GENERAL                                                                         
-------                                                                         

Industrial Services of America, Inc. (the "Registrant") is            
an integrated solid waste management consulting company engaged                 
in the business of retail and industrial waste management and                   
waste handling equipment sales and service.  The Registrant is                  
able to offer a "total package" concept to retail and industrial                
clients to cover their waste management needs.  The Registrant                  
believes that it offers a more complete line of products and                    
services than its competitors and is better able to coordinate                  
these services on a nationwide basis.  By offering competitively                
priced waste handling equipment from a number of different                      
manufacturers, the Registrant is able to tailor equipment                       
packages for individual client needs.  By carrying limited                      
inventory, the Registrant reduces overhead and passes the savings               
to the customer.  The waste management services offered by the                  
Registrant include locating a hauling company at a reasonable                   
cost for each respective location for any chain on the management               
program.  Because the Registrant is not a "waste transporter," it               
is able to maintain a neutral position.  The proprietary computer               
software designed and developed by the Registrant for use in its                
daily operations allows the Registrant access to relevant waste                 
information throughout the United States and puts relevant                      
customer information within reach of Registrant personnel.  The                 
Registrant also manages a recycling operation for an affiliated                 
company, for which it retains a percentage of the profits from                  
said operation.                                                                 

The Registrant plans to grow by expanding its marketing base          
and seeking future joint ventures which can enhance its                         
marketability and visibility.  The Registrant continues to target               
industrial customers throughout the United States for the purpose               
of increasing its industrial clientele.  Although the number of                 
locations of each customer will generally be less than with large               
retail chains, the Registrant believes that it can provide                      
substantial savings for each industrial location, thereby                       
justifying larger management fees.  With industrial clients,                    
there is also a greater possibility of large equipment orders as                
the solid waste output for each individual industrial location is               
generally greater than for retail clients and the corresponding                 
need for appropriate equipment is greater.                                      

The Registrant has developed nationwide coverage through its          
computer system designed to integrate information pertinent to                  
its waste management services throughout the country.  This                     
system provides the Registrant access to hauling and disposal                   
rates as well as equipment, installation, and shipping costs.                   
The Registrant has the ability to estimate cost savings to                      

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potential customers by reviewing their current waste hauling                    
invoices nationwide or a regional sampling thereof.                             

The Registrant believes that opportunities for its continued          
growth are enhanced by the increasingly stringent regulatory and                
political constraints being placed on the waste hauling and                     
disposal industries on a federal, state and local level.  These                 
more stringent regulations continue to drive prices higher                      
throughout the industry.  With these ever-increasing costs                      
relating to solid waste disposal, retail and industrial customers               
are realizing that waste disposal is quickly becoming one of                    
their biggest expense items and perhaps the most difficult to                   
contain.  The Registrant believes these increased costs will                    
enhance the value of the Registrant's services.                                 

In April 1992, the Registrant entered into a management               
agreement (the "Management Agreement") with K & R Corporation ("K               
& R"), a Kentucky corporation, and an affiliated company owned by               
the Registrant's principal stockholder in which the Registrant is               
responsible for the management of the scrap and corrugated paper                
recycling for K & R.  Under the terms of the Management                         
Agreement, the Registrant purchased certain rental equipment and                
scrap metal inventories from K & R, manages K & R's operations                  
and in consideration thereof retains a percentage of the profits                
generated from the operation(s).  The Management Agreement                      
provides that the Registrant will retain 60% of the profits                     
generated from K & R's operations.  During 1995 and 1994, revenue               
derived under this arrangement resulted in income before                        
provision for income taxes to the Registrant totaling $728,391                  
and $236,330, respectively.                                                     

During the third quarter of 1993, the Registrant invested in          
an online computer database, RecycleLine, which provides                        
recycling information to subscribers nationwide.  The Registrant                
decided to cease its investment in this venture.  Accordingly, on               
December 15, 1994, the Registrant assigned back its interest in                 
RecycleLine to Recycling Data Management Corporation ("RDMC") and               
retained an option for five (5) years to re-acquire a 40%                       
interest in RecycleLine and/or a 40% equity interest in RDMC                    
based upon an exercise price equal to the book value of RDMC's                  
shares at such time.                                                            

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The Registrant provides waste management consulting                   
services to its customers.  Prior to 1994, the Registrant's                     
service and consulting revenue was derived principally from                     
management fees paid by its customers.  The Registrant collected                
funds from its customers for services rendered, retained its                    
management fee, and remitted the remaining funds to third party                 
vendors who performed the waste removal and maintenance services.               
In 1994, because of certain market dynamics, changes in the                     
industry and changes related to the Registrant's operations,                    
management reevaluated the Registrant's manner of conducting                    
business.  Based on this reevaluation, the Registrant's pricing                 
process was modified.  As a result, the majority of the                         
Registrant's customers pay a negotiated fee for their waste                     
service needs, and in turn the Registrant subcontracts the                      
necessary work to third party vendors and pays those vendors for                
their services.                                                                 

REGISTRANT BACKGROUND                                                           
---------------------                                                           

The Registrant was incorporated in October, 1953 in Florida           
under the name Alson Manufacturing, Inc.  From the date of                      
incorporation through January 5, 1976, the Registrant was                       
involved in the designing and manufacturing of various forms of                 
electrical products.  In 1979, the Board of Directors and the                   
shareholders of the Registrant approved a proposal to liquidate                 
Alson.  In 1983, the Registrant commenced liquidation of all the                
tangible assets of Alson.  On October 27, 1983, Harry Kletter                   
acquired 419,500 shares of common stock of the Registrant.  The                 
existing directors resigned and five new directors were elected.                

On July 1, 1984, the Registrant began a solid waste handling          
and disposal equipment sales organization under the name Waste                  
Equipment Sales and Service Company ("WESSCO").  On January 1,                  
1985, the Registrant merged with Computerized Waste Systems, Inc.               
("CWS"), a Massachusetts corporation.  CWS was a corporation                    
specializing in offering solid waste management consultations for               
large multi-location companies involved in the retail, restaurant               
and industrial sectors.  At the time of the merger, CWS was                     
concentrating on large retail chains, but has changed its                       
emphasis to include industrial clients.  This strategy created an               
additional target market for the Registrant.  Subsequent to the                 

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merger with CWS, the Registrant moved CWS headquarters from                     
Springfield, Massachusetts to Louisville, Kentucky.  At the time                
of the merger, much of the client base and marketing efforts were               
concentrated in the Northeast.  With the move to Louisville, the                
Registrant began to expand its marketing efforts, which are now                 
nationwide and include most of Canada.                                          

The Registrant operates primarily through WESSCO and CWS,             
which work closely with each other in terms of present customer                 
care and proposals for new customers.  WESSCO has expanded its                  
product line and presently offers a variety of equipment which                  
would be necessary for an efficient waste handling and/or                       
recycling system for an individual user.  The prices WESSCO can                 
offer are competitive with most dealers since it purchases                      
equipment at dealer cost without having to pay dealer overhead.                 
The WESSCO program has attracted some customers planning                        
expansion programs.  Some of these have designated WESSCO as                    
their exclusive waste equipment supplier and consultant.  By                    
working with the customer from the time the initial building                    
plans are developed, WESSCO has input into the design,                          
development and implementation of the waste handling system.                    

CWS has developed a network of over 1000 vendors throughout           
the United States which includes hauling companies, recycling                   
companies and equipment manufacturing and maintenance companies.                
Through this network, the Registrant is able to provide pricing                 
estimates for potential customers in a timely fashion.  CWS                     
customer representatives have access to this information through                
the computer software designed and developed to accommodate the                 
daily needs of the Registrant.  Through this information                        
retrieval system, customer representatives can review the                       
accuracy of customer concerns from recent billings to hauling                   
rates to the average monthly cost of service.                                   

The Registrant derives a significant portion of its revenues          
from a single customer.  The Registrant is taking affirmative                   
action to counter its dependence on any one customer.  The                      
potential negative effect of losing any single customer has been                
lessened by the Registrant's expansion of its customer base.                    
However, there can be no assurance that if the Registrant were to               
lose all or the substantial portion of the business with this one               
customer that such loss would not have a material adverse effect                
on the Registrant.                                                              

Although the expansion of the Registrant's marketing base             
has been a gradual process, it appears that its efforts are                     
beginning to provide positive results.  The Registrant has                      
cautiously studied new markets before engaging in business in                   
such markets.  The Registrant has a number of proposals pending                 
at various industrial and retail locations throughout the United                
States.  Many of these proposals involve both equipment and                     

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management service contracts.  Management has no assurances that                
any of these proposals will be accepted.                                        

In addition to the Registrant's expanded marketing coverage,          
the Registrant is in its third year of offering a new line of                   
services to customers.  The new services consist mainly of                      
consulting services relating to recycling and waste stream                      
analysis.  The main advantage to offering consulting services is                
that the individual projects are priced on a substantial prepaid                
individual basis.  This allows the Registrant to collect an up-                 
front fee with the opportunity to "sell" the customer traditional               
services after the consulting and/or any subsequent                             
implementation is complete.  By offering consulting services, the               
Registrant is able to pursue an additional customer base.                       

The Registrant's sales/marketing emphasis has shifted in the          
last three years from the traditional management services offered               
to multi-location retail customers to industrial/manufacturing                  
customers.  The Registrant believes that the profitability of its               
operations will be enhanced through the procurement of these                    
accounts.  Once a new system or methodology has been initiated,                 
the need for the Registrant's traditional services continues.                   
These services can be offered on a discounted basis since the                   
consulting "retainer" is usually substantial.  There is also an                 
opportunity to sell new equipment since many industrial clients                 
have obsolete or inappropriate systems in place.                                

INDUSTRY BACKGROUND                                                             
-------------------                                                             

The Registrant is involved in the management of non-                  
hazardous solid waste and recyclables for retail and industrial                 
customers.  As such, the industry is actually driven by the solid               
waste collection and disposal industry.  The solid waste                        
collection and disposal industry is a multi-billion industry.                   
The size of this industry has increased for the past several                    
years and should continue to increase as landfill space becomes                 
more scarce, thereby reducing the supply of ultimate disposal                   
facilities with no corresponding decrease in demand for ultimate                
disposal.  Although society (and industry) has developed an                     
increased awareness of the environmental issues and recycling has               
increased, waste production continues to increase.  Because of                  
environmental concerns, new regulations and cost factors, it has                
become difficult to obtain the necessary permits to build any new               
landfills.  Management believes that the landfill shortage will                 
become a greater national problem in the future.                                

The rising costs associated with solid waste disposal have            
created additional opportunities for the Registrant.  Because                   
waste disposal has begun to take an increasingly larger                         
percentage of the total monthly expenditures incurred by                        
commercial establishments, the Registrant believes that the                     

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services offered by the Registrant will be in greater demand.                   
Many commercial establishments that never paid attention to the                 
costs associated with waste disposal in the past are now looking                
for ways to reduce expenses in this area.  The Registrant is able               
to offer commercial establishments its expertise to lower waste                 
disposal bills and initiate recycling programs to generate                      
additional revenues and/or reduce costs and materials bound for                 
ultimate disposal.                                                              

In addition to increasing landfill costs, regulatory                  
measures and more stringent control of materials bound for                      
disposal ("flow control") are making the management of solid                    
waste an increasingly difficult problem.  The United States                     
Environmental Protection Agency (the "EPA") is expected to                      
continue the present trend of restricting the amount of                         
"potentially" recyclable material bound for landfills.  Most                    
states have passed, or are contemplating measures which would                   
require, commercial establishments to recycle a minimum                         
percentage of their waste stream and would restrict the                         
percentage of recyclable materials in any commercial load of                    
solid waste material.  Most states have already passed                          
restrictive regulations requiring a plan for the reduction of                   
waste or the segregation of recyclable materials from the waste                 
stream at the source.  Management of the Registrant believes that               
these restrictions may create additional marketing opportunities                
as waste disposal needs within commercial establishments become                 
more specialized.  Some large commercial establishments have                    
hired in-house staff to handle the solid waste management and                   
recycling responsibilities, but have found that without adequate                
resource and staff support, this may not be an effective                        
alternative.  The Registrant offers these establishments a                      
possible solution to this increasingly burdensome task.                         

COMPETITION                                                                     
-----------                                                                     

On a commercial/industrial waste management level, the                
Registrant has competition from a variety of sources.  Much of it               
is from companies which concentrate their efforts on a regional                 
level.  Some of these companies may be able to handle a small                   
national account, but most do not have the resources available to               
handle accounts of national significance.                                       

There has been increased competition from national hauling            
companies.  The large national hauling companies often attempt to               
handle an entire chain of locations for a "national chain"                      
client.  This scenario poses a potential conflict of interest                   
since these hauling companies can attain greater profitability                  
from increases in hauling and disposal revenues.  In addition to                
having an interest in raising hauling and disposal rates, the                   
national hauling companies do not have operations in every city                 
and do not, to the knowledge of management, have some of the                    

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billing and computer capabilities which the Registrant is able to               
offer.  Additionally, management has encountered evidence of some               
reluctance from independent hauling companies to work with a                    
national hauling company.                                                       

There is also competition from some equipment manufacturers.          
These companies have their primary interest in selling or leasing               
equipment and offer management services in order to secure these                
sales (or leases).  There is a cost involved in "using" the                     
equipment and the money saved must justify the amount spent on                  
this equipment.                                                                 

An important difference between the Registrant and the                
majority of its competition is the Registrant's management                      
process.  The systematic approach attempts to provide consistent                
results for the customer.  At the implementation stage, the                     
Registrant actively "bids out" every location that a new customer               
requests.  The Registrant repeats this bidding process at any                   
time that a client receives notice of an undocumented price                     
increase or at regular intervals as indicated in the contractual                
relationship.  At subsequent stages, the Registrant will evaluate               
a customer's solid waste program and give suggested alternatives                
for improvement.                                                                

The Registrant has developed a network of maintenance                 
companies and hauling companies throughout the country and due to               
the volume of business awarded to them by the Registrant, often                 
these companies will offer discounted hauling and maintenance                   
rates to the Registrant.  However, the Registrant is not                        
"affiliated" with any particular company or vendor in the hauling               
and/or maintenance industries, but rather deals with those                      
companies and vendors that can supply quality service at a                      
favorable price.  In addition to the volume of business handled                 
by some of these "vendors," the vendors understand that as long                 
as the accounts are well-serviced, they will be invited to bid on               
future accounts.                                                                

Few, if any, of the Registrant's competitors have a national          
network of vendors similar to the one the Registrant has                        
developed over its years of operation.  The major hauling                       
companies are limited in the scope of services which they can                   
provide to commercial/industrial accounts.  Although the major                  
hauling companies have operating companies in most major and                    
intermediate-sized cities, they do not have nationwide geographic               
coverage.  Therefore, for large commercial/industrial clients,                  
they must obtain bids from local hauling companies that may                     
perceive them to be future competitors.                                         

Most of the direct competition is from small regional                 
companies that bid on regional accounts or national accounts on a               
regional basis.  Few of the Registrant's competitors appear to be               
equipped to handle large national accounts nor do they seem to                  

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have the inclination to expand their geographic coverage.  There                
are numerous national companies in closely related businesses,                  
including national hauling companies, that have substantially                   
greater financial resources than does the Registrant.  Should any               
of these companies decide to compete directly with the                          
Registrant, it could have a material adverse effect on the                      
business of the Registrant.                                                     

EMPLOYEES                                                                       
---------                                                                       

The Registrant has approximately 78 full-time employees               
and approximately [10] independent consultants which provide                    
professional services.  Pursuant to the terms of the  Management                
Agreement between the Registrant and K & R, the Registrant                      
manages the operations of K & R.                                                

PROPOSED PROJECTS                                                               
-----------------                                                               

In an effort to diversify and expand the number of products           
and services offered to present and potential clients, the                      
Registrant has, over the course of the past five years, promoted                
in-store recycling systems and has consulted with clients                       
regarding the implementation of recycling programs.  Through its                
experiences, the Registrant has developed cost effective waste                  
minimization and recycling systems for retail and industrial                    
clients designed to fit the needs of the individual client(s) .                 
By increasing the number of services offered, the Registrant can                
offer existing clients additional services and can offer more                   
options to potential clients in the future.  Rather than being                  
considered a waste management company, the Registrant perceives                 
its role to be that of an environmental management company                      
arranging for the handling of the solid waste and recycling                     
requirements of its clients.                                                    

CAPITAL IMPROVEMENTS                                                            
--------------------                                                            

During the year 1995, the Registrant committed approximately          
$1,555,359 towards capital improvement with respect to its                      
facilities.  A significant portion of such funds were for a Moros               
Shear model H-L-500 and a Liebherr Crane model R932 HDSL.                       

The purchase of the Moros Shear is a major step in                    
modernizing the Registrant's facilities.  The Moros Shear is used               
to process ferrous scrap into specified sizes of material                       
acceptable at steel mills.  It has decreased down time and made                 
the facilities more efficient, cost effective and able to handle                
additional business.                                                            

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The Registrant also is involved in selling the Moros Shear.           
A local scrap recycler recently purchased a Moros Shear for                     
approximately $1,500,000.                                                       

Other purchases made by the Registrant included material              
handling equipment, conveyor systems, roll-off containers and                   
computer equipment.                                                             

EFFECT OF STATE AND FEDERAL ENVIRONMENTAL REGULATIONS                           
-----------------------------------------------------                           

Any environmental regulatory liability relating to the                
Registrant's operations is generally borne by the customers with                
which the Registrant contracts, and the third party vendors, in                 
their capacity as transporters.  As a matter of Registrant's                    
policy, the Registrant uses its best efforts to secure                          
indemnification for environmental liability from its customers                  
and third party vendors.  Although management of the Registrant                 
believes that for the most part its business does not subject it                
to potential environmental liability, in any event, the                         
Registrant uses its best efforts to be in compliance with                       
federal, state and local environmental laws, including but not                  
limited to the Comprehensive Environmental Response, Compensation               
and Liability Act of 1980, as amended, the Hazardous Materials                  
Transportation Act, as amended, the Resource Conservation and                   
Recovery Act, as amended, the Clean Air Act, as amended, and the                
Clean Water Act.  Such compliance in 1995 did not constitute a                  
material expense to the Registrant.                                             

The collection and disposal of solid waste, and rendering of          
related environmental services are subject to federal, state and                
local requirements which regulate health, safety, the                           
environment, zoning and land-use.  Federal, state and local                     
regulations vary, but generally govern disposal activities and                  
the location and use of facilities and also impose restrictions                 
to prohibit or minimize air and water pollution.  In addition,                  
governmental authorities have the power to enforce compliance                   
with these regulations and to obtain injunctions or impose fines                
in the case of violations, including criminal penalties.  These                 
regulations are administered by the EPA and various other                       
federal, state and local environmental, health and safety                       
agencies and authorities, including the Occupational Safety and                 
Health Administration of the U.S. Department of Labor.                          

The Registrant strives to conduct its operations in                   
compliance with applicable laws and regulations.  While such                    
amounts expended in the past or anticipated to be expended in the               
future have not had and are not expected to have a materially                   
adverse effect on the Registrant's financial condition or                       
operations, the possibility remains that technological,                         
regulatory or enforcement developments, the results of                          

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environmental studies or other factors could materially alter                   
this expectation.                                                               

Each state in which the Registrant operates has its own laws          
and regulations governing solid waste disposal, water and air                   
pollution and, in most cases, releases and cleanup of hazardous                 
substances and liability for such matters.  Several states have                 
enacted laws that will require counties to adopt comprehensive                  
plans to reduce, through waste planning, composting, recycling,                 
or other programs, the volume of solid waste landfills have                     
recently been promulgated in several states.  Legislative and                   
regulatory measures to mandate or encourage waste reduction at                  
the source and waste recycling also are under consideration by                  
Congress and the EPA.                                                           

Finally, various states have enacted, or are considering              
enacting, laws that restrict the disposal within the state of                   
solid or hazardous wastes generated outside the state.  While                   
laws that overtly discriminate against out of state waste have                  
been found to be unconstitutional, some laws that are less                      
overtly discriminatory have been upheld in court.  Challenges to                
other such laws are pending.  The outcome of pending litigation                 
and the likelihood that other such laws will be passed and will                 
survive constitutional challenge are uncertain.  In addition,                   
Congress is currently considering legislation authorizing states                
to adopt such restrictions.                                                     

ITEM 2.   DESCRIPTION OF PROPERTY                                               
-------   -----------------------                                               

The Registrant leases its corporate office facilities which           
consist of approximately 4000 square feet of usable office space                
for $3,750 per month.  The leased office space is located at 7100               
Grade Lane in Louisville, Kentucky.                                             

The Registrant manages the scrap recycling operations of              
K & R and pays $6,250 per month for the facilities used in this                 
operation.  This property is located at 7100 Grade Lane in                      
Louisville, Kentucky in the same "industrial complex" as the                    
Registrant's corporate offices.                                                 

Certain of the property and equipment of the Registrant and           
its subsidiaries are subject to liens securing payment of                       
portions of the Registrant's and its subsidiaries' indebtedness.                
See Note 6 of Notes to Consolidated Financial Statements included               
herein for information with respect to debt on these properties.                
The Registrant and its subsidiaries also lease certain of their                 
offices and equipment.  See Notes 7 and 8 of Notes to Consolidated              
Financial Statements included herein for information with respect               
to leased properties.  For additional information regarding properties          
owned and operated by the Registrant, see "Business."                           

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ITEM 3.   LEGAL PROCEEDINGS                                                     
-------   -----------------                                                     

There are no material proceedings pending by, or against the          
Registrant or any of its subsidiaries or affecting any of their                 
respective properties.                                                          

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                   
-------   ---------------------------------------------------                   

Not applicable.                                                       

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PART II               

ITEM 5.   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER                      
-------   ------------------------------------------------                      
MATTERS.                                                                        
-------                                                                         

There has been limited trading of the Registrant's stock              
since Harry Kletter purchased 419,500 shares in October 1983.  In               
the fourth quarter of 1995, the Registrant's common stock began                 
trading on the Over the Counter Bulletin Board ("OTCBB") operated               
by the National Association of Securities Dealers, Inc. ("NASD").               
For the previous seven years, the stock was traded on a secondary               
market basis and as a result, the Registrant did not believe it                 
could provide a meaningful range of high and low bid information                
for the Registrant's stock.  The following table sets forth, for                
the periods indicated, the high and low closing sales prices for                
the Registrant's common stock as quoted on the OTCBB.                           

                                                                [Download Table]

Quarter Ended                      1995             1994    
-------------                      ----             ----    
                                                            
                               High     Low     High     Low
                               ----     ---     ----     ---
March 31                        --       --      --       --
June 30                         --       --      --       --
September 30                    --       --      --       --
December 31                      8        4      --       --

There were approximately 438 shareholders of record as of             
March 25, 1996.                                                                 

The Registrant has never declared a cash dividend on its              
Common Stock.  The Board of Directors intends to retain all                     
earnings for investment into the Registrant's business and does                 
not anticipate paying any cash dividends in the foreseeable                     
future.  The retention of these earnings will be used to help                   
finance the Registrant's expansion programs.  Although there are                
no restrictions on the Registrant's present or future ability to                
pay dividends, the Board of Directors has the discretionary power               
to make that determination.                                                     

ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF                       
-------   -----------------------------------------------                       
OPERATION                                                   
---------                                                   

1.   Liquidity and Capital Resources                                            
-------------------------------                                       

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As of December 31, 1995 the Registrant held cash and cash             
equivalents of $507,889.                                                        

The Registrant derives its revenues from a variety of                 
sources, including customer services, equipment sales, consulting               
fees and from its scrap metal and recycling operations.  The                    
scrap metal and recycling operations comprised approximately 30%                
and 60% of the Registrant's income before provision for income                  
taxes for the years ended December 31, 1994 and 1995,                           
respectively.  In the event the Registrant was to operate without               
revenue derived from its scrap metal and recycling operations,                  
the Registrant's liquidity would be significantly decreased but                 
would not materially impair the Registrant's ability to continue                
its operations and business.                                                    

2.   Results of Operations                                                      
---------------------                                                 

The following table presents, for the years indicated, the            
percentage relationship which certain captioned items in the                    
Registrant's Consolidated Statements of Operations bear to total                
revenues and other pertinent data:                                              

                                                                [Download Table]

                                   Year ended December 31,  
                                 ---------------------------
                                     1995          1994     
                                   --------      --------   
STATEMENTS OF OPERATIONS DATA:                              

                                                            
Revenue .........................   100.0%        100.0%    
Cost of Operations ..............    80.0%         85.2%    
Selling, general and                                        
  administrative expenses .......    16.2%         14.1%    
Income from operations ..........     3.8%          0.7%    

REVENUE                                                                         
-------                                                                         

Revenue increased 31% from $23,379,994 in 1994 to                     
$30,545,142 in 1995.  This increase was due to a combination of                 
volume increases involving the scrap recycling operations, the                  
corrugated paper recycling operations and the CWS operations.                   

COSTS OF OPERATIONS AND OPERATING INCOME                                        
----------------------------------------                                        

Cost of operations increased $4,497,080, or 23%, from                 
$19,927,790 in 1994 to $24,424,870 in 1995.  As a percentage of                 
revenue, these costs were 85.2% and 80% in 1994 and 1995,                       
respectively.  This increase was directly related to the volume                 

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increases involving the scrap recycling operations, the                         
corrugated paper recycling operations and the CWS operations.                   

Selling, general and administrative expenses increased from           
$3,295,333 in 1994 to $4,958,077 in 1995.  These expenses                       
increased from 14.1% to 16.2% of revenue in 1994 and 1995,                      
respectively.  This increase was attributable to the promotion of               
sales growth and the increased cost associated with the continued               
improvement of the computer systems of the Registrant.  The                     
Registrant constantly reviews its selling, general and                          
administrative costs throughout its businesses in an effort to                  
maintain control of the level of spending for such costs.                       

INTEREST EXPENSE                                                                
----------------                                                                

Interest expense increased from approximately $2,336 in 1994          
to $36,760 in 1995.  This increase is primarily attributable to                 
increased borrowing to finance operating equipment acquisitions                 
during 1995.                                                                    

INCOME TAXES                                                                    
------------                                                                    

Provision for income taxes consists of the following for the          
years ended December 31, 1995 and 1994:                                         

                                                                [Download Table]
                                     1995           1994    
                                   --------       --------  

                                                            
Current:                                                    
Federal                            $ 386,700       $ 196,400
State and local                       92,700          60,600
                                   ---------       ---------

Current provision                    479,400         257,000

Deferred:                                                   
Federal                            $  31,900       $  29,300
State and local                        5,700             -0-
                                   ---------       ---------

Deferred provision                    37,600          29,300
                                   ---------       ---------

Provision for income taxes         $ 517,000       $ 286,300
                                   =========       =========

INCOME AND EARNINGS PER SHARE                                                   
-----------------------------                                                   

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The following table sets forth certain components of income           
from continuing and related earnings per share:                                 

                                                                [Download Table]

                                      Year ended December 31,   
                                   -----------------------------
                                       1995             1994    
                                    ----------       ---------- 

                                                                
Income from continuing                                          
  operations ....................   $1,162,195       $  156,871 

Net Income ......................      704,159          489,417 

Earnings per share ..............          .41              .28 

Weighted average shares                                         
  outstanding ...................    1,729,600        1,729,600 

Income from continuing operations increased considerably              
from $156,871 in 1994 to $1,162,195 in 1995.  Earnings per share                
from continuing operations are attributable to the increase in                  
the Registrant's revenue and continued cost control efforts.                    

INFLATION AND PREVAILING ECONOMIC CONDITIONS                                    
--------------------------------------------                                    

To date, inflation has not and is not expected to have a              
significant impact on the Registrant's operations in the near                   
term.  The Registrant has no long-term fixed-price contracts and                
the Registrant believes it will be able to pass through most cost               
increases resulting from inflation to its customers.                            

FINANCIAL CONDITION AT DECEMBER 31, 1995 COMPARED TO DECEMBER 31,               
-----------------------------------------------------------------               
1994                                                                            
----                                                                            

Accounts receivable increased from $2,383,503 as of December          
31, 1994 to $3,241,290 as of December 31, 1995 due to the                       
increase in the Registrant's revenues.                                          

The increase in accounts payable from $2,504,028 as of                
December 31, 1994 to $3,600,857 as of December 31, 1995 is                      
attributable to the increase in the Registrant's operations in                  
1995.  This increase was due to a combination of volume increases               
involving the scrap recycling operations, the corrugated paper                  
recycling operations and the CWS operations.                                    

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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 $750,000.  Indebtedness under this                
credit facility earns interest based on the Bank's prime rate as                
promulgated from time to time.  The maturity date under this                    
credit facility is June 30, 1997.  As of December 31, 1995,                     
$350,000 was outstanding under this credit facility.                            

ITEM 7.   FINANCIAL STATEMENTS                                                  
-------   --------------------                                                  

The response to this Item is submitted as a separate section          
of this report beginning on page F-1.                                           

ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON                      
------------------------------------------------            
ACCOUNTING AND FINANCIAL DISCLOSURE                         
-----------------------------------                         

The Registrant did not change accounting firms for the audit          
of the 1995 financial statements.  There were no disagreements                  
with the accountants in accounting and/or financial disclosure                  
matters.                                                                        

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PART III                

ITEM 9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL                  
----------------------------------------------------        
PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE      
------------------------------------------------------      
ACT                                                         
---                                                         

EXECUTIVE OFFICERS AND DIRECTORSHIPS                                            
------------------------------------                                            

The following is a list of the names of the directors and             
executive officers of the Registrant as of March 25, 1996, their                
respective ages, and their respective positions with the                        
Registrant, as well as the dates of their terms.                                

Name              Age              Position                           
----              ---              --------                           

Harry Kletter           69         Chairman of the Board, Chief                 
              Executive Officer, Chief
                  Financial Officer, President
  and Director

Matthew Kletter         36         Secretary and Director                       

Roberta Kletter         62         Vice President and Director                  

There are no arrangements or understandings pursuant to               
which the above-named persons were selected/elected to the                      
respective positions held.                                                      

BUSINESS EXPERIENCE AND FAMILY RELATIONSHIPS                                    
--------------------------------------------                                    

HARRY KLETTER has been a director of the Registrant since 1983.                 
-------------                                                                   
In October, 1983 he was elected Chairman of the Board and Chief                 
Executive Officer.  Mr. Kletter served as President of the                      
Registrant from October, 1983 until January, 1988 and again from                
January, 1990 until July, 1991.  Mr. Kletter resumed the position               
of President in July 31, 1992 subsequent to Edward List's                       
resignation.  Prior to his involvement with the Registrant, Mr.                 
Kletter was President and Chief Executive Officer of K & R                      
Corporation, a waste handling manufacturing company.  Mr. Kletter               
currently owns 50% of the stock in K & R Corporation which is now               
a real estate holding company and materials processing company.                 
Prior thereto, Mr. Kletter was the President of Tri-City                        
Industrial Services, Inc., which corporation was involved in the                
transportation, disposal and management of solid waste.  From                   
1980 to present, Mr. Kletter had been an investor in various                    

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other business ventures including Outer Loop Business Park and                  
Outer Loop Industrial Park which are each real estate ventures in               
the Louisville, Kentucky area.                                                  

ROBERTA KLETTER has been a Director and Secretary of the                        
---------------                                                                 
Registrant since 1983.  Since 1989, Ms. Kletter has served as                   
Marketing Director for the Registrant.  As such, she is                         
responsible for public relations, advertising and promotional                   
material.  Prior to her current position with the Registrant, Ms.               
Kletter served as a manager for Waste Equipment Sales and Service               
Company.  Roberta Kletter is the wife of Harry Kletter.                         

MATTHEW L. KLETTER is an attorney who practices law primarily in                
------------------                                                              
New York City.  Mr. Kletter has provided services, on an                        
independent contractor basis, for the Registrant since 1989.  Mr.               
Kletter received a Bachelor of Arts from the University of                      
Michigan in 1981 and a Juris Doctor Degree from Brooklyn Law                    
School in 1984.  Prior to 1989, Mr. Kletter served as the                       
Director of Legal and Business Affairs for Magera Management                    
Corporation, a financial and administrative company within the                  
motion picture industry.  Mr. Kletter also maintains an                         
independent legal practice in New York City specializing in                     
Entertainment Law.  Mr. Kletter is admitted to the bars of New                  
York State and the Commonwealth of Kentucky.  Mr. Kletter is the                
nephew of Harry Kletter.  Mr. Kletter is a member of the New York               
State Bar Association, the Kentucky Bar Association and the                     
Association of the Bar of The City of New York.                                 

Each director serves until the next annual meeting of                 
stockholders and until his successor has been duly elected and                  
has qualified.  Officers serve at the discretion of the Board of                
Directors.                                                                      

None of the directors hold another directorship in a company          
with a class of securities registered pursuant to Section 12 of                 
the Securities Exchange Act of 1934, as amended, or subject to                  
the requirements of Section 15(d) of that Act or in a company                   
registered as an investment company under the Investment Company                
Act of 1940, as amended.                                                        

INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS                                        
----------------------------------------                                        

Not Applicable                                                        

IDENTIFICATION OF CERTAIN SIGNIFICANT EMPLOYEES                                 
-----------------------------------------------                                 

NAME             AGE               TITLE                              
----             ---               -----                              

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Charles Hulsman        40          Divisional Manager                           

Tim Myers              44          Divisional Manager                           

Alan Schroering        31          Director of Finance and                      
Accounting

CHARLES HULSMAN has been with the Registrant since 1983 and has                 
---------------                                                                 
served in various management capacities throughout his years with               
the Registrant.  Mr. Hulsman is presently serving as manager for                
the Registrant's CWS division and as such is responsible for the                
daily operations of this division.  Prior to taking on the                      
management responsibilities in December 1991, Mr. Hulsman was a                 
sales representative for the Registrant's WESSCO division.                      

TIM MYERS has been employed by the Registrant and/or predecessor                
---------                                                                       
companies since 1973.  Mr. Myers has served in various                          
operational capacities of waste hauling companies, landfills, a                 
waste equipment manufacturer, transfer stations, recycling                      
facilities, and scrap metal and paper operations.                               

ALAN SCHROERING has been with the Registrant since 1984 and has                 
---------------                                                                 
served in various accounting capacities throughout his years with               
the Registrant.  Mr. Schroering received a Bachelor of Science in               
Business from Indiana University in 1995.  Mr. Schroering is                    
presently serving as controller for the Registrant.                             

ITEM 10.  EXECUTIVE COMPENSATION                                                
--------  ----------------------                                                

Set forth below is information concerning the annual                  
compensation for services in all capacities to the Registrant of                
the Chief Executive Officer of the Registrant for the last three                
fiscal years ending December 31.                                                

                                                                [Download Table]

                   Summary Compensation Table                          
                   --------------------------                          

                                Annual Compensation                    
                -------------------------------------------------------

                                                Other                  
Name and                                        Annual        Total    
Principal                                    Compensation  Compensation
Position        Year  Salary ($)  Bonus ($)      ($)            ($)    
-----------------------------------------------------------------------

                                                                       
Harry Kletter,  1995  $100,000                 $ 975**       $100,975  
President       1994  $200,000                 $ 975**       $200,975  

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and CEO         1993  $ 50,000                 $ 975**       $ 50,975  

*Long Term Compensation, Awards and all other Compensation are                  
not applicable.                                                                 

** - Includes taxable use of company vehicle.                                   

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND                   
--------  ---------------------------------------------------                   
MANAGEMENT                                                  
----------                                                  

(a)  Insofar as is known to the Registrant, no person owns            
of record or beneficially five (5%) percent or more of the voting               
shares of the Registrant's outstanding Common Stock, except as                  
set forth below:                                                                

                                                                [Download Table]

              Name and Address     Amount and Nature           
 Title          of Beneficial        of Beneficial     Percent 
of Class           Owner               Ownership       of Class
--------      ----------------     -----------------   --------

                                                               
Common Stock  Harry Kletter           Record and         23.3% 
$.01 Par      1208 Park Hills Ct.     Beneficial               
Value         Louisville, KY 40207    409,500                  

Common Stock  K & R Corporation       500,000            28.4% 
$.01 Par      7100 Grade Lane                                  
Value         Louisville, KY 40213                             

Common Stock  Roberta Kletter         Record and         11.4% 
$.01 Par      1208 Park Hills Ct.     Beneficial               
Value         Louisville, KY 40207    200,000                  

(b)  As of March 25, 1996, the total number of shares                 
beneficially owned by all directors of the Registrant is as set                 
forth below.                                                                    

                                                                [Download Table]

              Name and Address     Amount and Nature           
 Title          of Beneficial        of Beneficial     Percent 
of Class           Owner               Ownership       of Class
--------      ----------------     -----------------   --------

                                                               
Common Stock  All Directors and       Record and         66.6% 
$.01 par      Officers as a           Beneficial               
Value         Group                   1,170,600                

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(c)  There are no contractual arrangements known to the               
Registrant, including any pledge of securities by the Registrant,               
by which the operation of its term may at a subsequent date                     
result in a change in control of the Registrant.                                

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                        
--------  ----------------------------------------------                        

TRANSACTIONS WITH MANAGEMENT AND OTHERS                                         
---------------------------------------                                         

The Registrant leases certain facilities from K & R in which          
Mr. Kletter is the President and principal shareholder.  The                    
Registrant enters into business transactions with K & R when the                
terms are beneficial to both parties [and not necessarily on                    
terms that are equal to transactions that would be negotiated at                
arm's length].                                                                  

In April 1992, the Registrant entered into a Management               
Agreement with K & R and an affiliated company owned by the                     
Registrant's principal stockholder in which the Registrant is                   
responsible for the management of the scrap and corrugated paper                
recycling for K & R.  Under terms of the Management Agreement,                  
the Registrant purchased certain rental equipment and scrap metal               
inventories from K & R, manages K & R's operations and in                       
consideration thereof retains a percentage of the profits                       
generated from the operations.  The Management Agreement is                     
renewable on a bi-annual basis and may be cancelled by either                   
party upon 60 days written notice by the Registrant.  The                       
Management Agreement provides that the Registrant will retain 60%               
of the profits generated from K & R's operations rather than 90%.               
During 1994 and 1995, income derived under the Management                       
Agreement resulted in income before provision for income taxes of               
$236,330 and $728,391, respectively, to the Registrant.                         

In July, 1993 the Registrant entered into an agreement with           
Recycling Data Management Corporation ("RDMC") to purchase a 50%                
joint venture interest in an online bulletin board service                      
designed for the recycling industry.  For the year ended December               
31, 1994 the RecycleLine reported a loss of $37,135.  The                       
Registrant decided to cease its involvement in this venture.  On                
December 15, 1994 the Registrant assigned its interest in                       
RecycleLine to RDMC.  In addition, the Registrant loaned RDMC                   
$25,000.  The outstanding principal of this loan bears interest                 
at the prime rate of interest as quoted by the Bank from time to                
time and is secured by RDMC's stock.  The principal of this loan                
and accrued interest is payable on December 31, 1999.  In                       
exchange for the assignment and the loan, the Registrant received               
an option to purchase (i) a 40% joint venture interest in                       
RecycleLine and/or (ii) stock of RDMC equal to 40% of the then                  
outstanding stock of RDMC based on the book value of RDMC shares                
at the exercise date.  The option exercise period extends through               
December 31, 1999.                                                              

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CERTAIN BUSINESS RELATIONSHIPS                                                  
------------------------------                                                  
See above                                                                       

INDEBTEDNESS OF MANAGEMENT                                                      
--------------------------                                                      
Not Applicable                                                                  

TRANSACTIONS WITH PROMOTERS                                                     
---------------------------                                                     
Not Applicable                                                                  

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PART IV                 

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K                                      
--------  --------------------------------                                      

(a)  Exhibits.  See Index to Exhibits.  The following Financial                 
--------                                                              
Statements are filed as a part of this report on the pages                      
indicated.                                                                      

FINANCIAL STATEMENTS                                                            
--------------------                                                            
                                              PAGE

Report of Independent Auditors                                F-1               

Consolidated Balance Sheets as of December 31, 1995                             
and 1994                                                      F-2               

Consolidated Statements of Operations for the                                   
years ended December 31, 1995 and 1994                        F-4               

Consolidated Statements of Stockholders' Equity                                 
for the years ended December 31, 1995 and 1994                F-5               

Consolidated Statements of Cash Flows for the                                   
years ended December 31, 1995 and 1994                        F-6               

Notes to Consolidated Financial Statements                    F-7               

(b)  Reports on Form 8-K The Registrant did not file any Reports                
-------------------                                                   
on Form 8-K during the last quarter of the fiscal year of the                   
Registrant ended December 31, 1995.                                             

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REPORT OF INDEPENDENT AUDITORS                    

The Board of Directors and Stockholders                                         
Industrial Services of America, Inc.                                            
and subsidiary                                                                

We have audited the accompanying consolidated balance sheets of                 
Industrial Services of America, Inc. and subsidiary as of                       
December 31, 1995 and 1994, and the related consolidated                        
statements of operations, stockholders' equity, and cash flows                  
for the years then ended.  These consolidated financial                         
statements are the responsibility of the Company's management.                  
Our responsibility is to express an opinion on these consolidated               
financial statements based on our audits.                                       

We conducted our audits in accordance with generally accepted                   
auditing standards.  Those standards require that we plan and                   
perform the audit to obtain reasonable assurance about whether                  
the consolidated financial statements are free of material                      
misstatement.  An audit includes examining, on a test basis,                    
evidence supporting the amounts and disclosures in the                          
consolidated financial statements.  An audit also includes                      
assessing the accounting principles used and significant                        
estimates made by management, as well as evaluating the overall                 
financial statement presentation. We believe that our audits                    
provide a reasonable basis for our opinion.                                     

In our opinion, the consolidated financial statements referred to               
above present fairly, in all material respects, the financial                   
position of Industrial Services of America, Inc. and subsidiary                 
as of December 31, 1995 and 1994, and the consolidated results of               
their operations and their cash flows for the years then ended in               
conformity with generally accepted accounting principles.                       

/s/ Mather, Hamilton & Co.                                                      
MATHER, HAMILTON & CO.                                                          
Louisville, Kentucky                                                            
February 9, 1996                                                                

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INDUSTRIAL SERVICES OF AMERICA, INC.                                            
AND SUBSIDIARY                                                                  
CONSOLIDATED BALANCE SHEETS                                                     

December 31, 1995 and 1994                                                      
========================================================================        

                                                                [Download Table]

ASSETS                                                                 

                                                1995           1994    
                                                ----           ----    

                                                                       
CURRENT ASSETS                                                         
 Cash                                        $  507,889     $  354,884 
 Receivables:                                                          
   Trade, net of allowance for doubtful                                
    accounts of $16,000 in 1995 and                                    
    $10,000 in 1994                           3,241,290      2,380,446 
   Other                                          -              3,057 
                                             -----------    -----------

      Total receivables                       3,241,290      2,383,503 
 Net investment in sales-type leases             29,273         36,797 
 Inventories                                    138,503        161,211 
 Deferred tax asset                               6,400          -     
 Other                                          168,773        140,868 
                                             -----------    -----------

   Total current assets                       4,092,128      3,077,263 

Net property and equipment                    1,961,381        941,302 

Other assets                                    155,852         74,884 
                                             -----------    -----------

TOTAL ASSETS                                 $6,209,361     $4,093,449 

                                    ===========    ===========

See accompanying notes.                                                         
------------------------------------------------------------------------        
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========================================================================        

                                                                [Download Table]

LIABILITIES AND STOCKHOLDERS' EQUITY                                   

                                                1995           1994    
                                                ----           ----    

                                                                       
CURRENT LIABILITIES                                                    
 Note payable to bank                        $    -         $   50,000 
 Accounts payable                             3,600,857      2,504,028 
 Income taxes payable                           184,126        288,385 
 Current maturities of long-term debt            19,797         14,141 
 Other current liabilities                      202,555        137,307 
                                             -----------    -----------

   Total current liabilities                  4,007,335      2,993,861 

Long-term debt                                  367,431         13,152 

Deferred tax liability                           66,600         22,600 

Commitments                                                            

STOCKHOLDERS' EQUITY                                                   
 Common stock, $.01 par value, 10,000,000                              
   shares authorized; 1,757,500 shares issued    17,575         17,575 
 Additional paid-in capital                      27,000         27,000 
 Retained earnings                            1,731,420      1,027,261 
 Treasury stock, at cost, 27,900 shares          (8,000)        (8,000)
                                             -----------    -----------

   Total stockholders' equity                 1,767,995      1,063,836 
                                             -----------    -----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $6,209,361     $4,093,449 
                                             ===========    ===========

-------------------------------------------------------------------------     
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INDUSTRIAL SERVICES OF AMERICA, INC.                                            
AND SUBSIDIARY                                                                  
CONSOLIDATED STATEMENTS OF OPERATIONS                                           

YEARS ENDED DECEMBER 31, 1995 AND 1994                                          

==========================================================================      

                                                                [Download Table]

                                                1995           1994    
                                                ----           ----    

                                                                       
REVENUE                                                                
 Net sales                                  $30,248,460    $23,174,452 
 Rental income                                  296,682        205,542 
                                            ------------   ------------

   Total revenue                             30,545,142     23,379,994 

COST AND EXPENSES                                                      
 Cost of sales                               24,308,299     19,842,937 
 Direct expenses applicable to                                         
   rental income                                116,571         84,853 
 Selling, general and administrative                                   
    expenses                                  4,958,077      3,295,333 
                                            ------------   ------------

        Total cost and expenses              29,382,947     23,223,123 
                                            ------------   ------------

Income from operations                        1,162,195        156,871 

Other income, net                                58,964        618,846 
                                            ------------   ------------

Income before provision for income taxes      1,221,159        775,717 

Provision for income taxes                      517,000        286,300 
                                            ------------   ------------

NET INCOME                                  $   704,159    $   489,417 
                                            ============   ============

EARNINGS PER COMMON SHARE                   $       .41    $       .28 
                                            ============   ============

See accompanying notes.                                                         
-------------------------------------------------------------------------       
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INDUSTRIAL SERVICES OF AMERICA, INC.                                            
AND SUBSIDIARY                                                                  
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY                                 

YEARS ENDED DECEMBER 31, 1995 AND 1994                                          
============================================================================    

                                                                [Download Table]

                  Common Stock     Additional                                    
                  ------------      Paid-in    Retained   Treasury               
                 Shares    Amount   Capital    Earnings     Stock       Total    
                 ------    ------   -------    --------   --------      -----    

                                                                                 
Balance as of                                                                    
January 1,                                                                       
1994            1,729,600  $ 17,575  $ 27,000  $  537,844  $ (8,000)  $  574,419 

Net income           -         -         -        489,417       -        489,417 
               ----------  --------  --------  ----------  --------   ---------- 

Balance as of                                                                    
December 31,                                                                     
1994            1,729,600    17,575    27,000   1,027,261    (8,000)   1,063,836 

Net income           -         -         -        704,159       -        704,159 
               ----------  --------  --------  ----------  --------   -----------

BALANCE AS OF                                                                    
DECEMBER 31,                                                                     
1995            1,729,600  $ 17,575  $ 27,000  $1,731,420  $ (8,000)  $1,767,995 
               ==========  ========  ========  ==========  ========  ==========  

See accompanying notes.                                                         
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INDUSTRIAL SERVICES OF AMERICA, INC.                                            
AND SUBSIDIARY                                                                  
CONSOLIDATED STATEMENTS OF CASH FLOWS                                           

YEARS ENDED DECEMBER 31, 1995 AND 1994                                          
=================================================================               

                                                                [Download Table]

                                                1995           1994    
                                                ----           ----    

                                                                       
OPERATING ACTIVITIES                                                   
 Net income                                 $   704,159    $   489,417 
 Adjustments to reconcile net                                          
     income to net cash provided by                                    
     operating activities:                                             
   Depreciation and amortization                329,481        189,501 
   Provision for doubtful accounts               33,200          -     
   Deferred income taxes                         37,600         29,300 
   Special charge                                 -            108,006 
   Gain on sale of property and                                        
     equipment                                  (42,287)       (10,091)
   Increase (decrease) in cash                                         
     resulting from changes in:                                        
       Receivables                             (863,787)      (176,332)
       Inventories                               22,708        (88,564)
       Prepaid expenses                          72,095       (106,573)
       Accounts payable                       1,096,829       (419,286)
       Income taxes payable                    (104,259)       146,585 
       Other current liabilities                 65,248        (36,903)
                                            ------------  ------------ 

   Net cash provided by operating                                      
     activities                               1,350,987        125,060 

INVESTING ACTIVITIES                                                   
 Purchase of restricted investment             (100,000)         -     
 Proceeds from sale of investment                 -              3,340 
 Increase in notes receivable to                                       
   affiliated company                             -            (37,135)
 Payments on notes receivable -                                        
   affiliated company                             -            109,000 
 Notes receivable                                (2,200)       (25,000)
 Proceeds from sale of property                                        
   and equipment                                119,580         29,888 
 Payments and deposits for property                                    
   and equipment                             (1,555,359)      (609,639)
                                            ------------  ------------ 

   Net cash used in investing                                          
     activities                              (1,537,979)      (529,546)

FINANCING ACTIVITIES                                                   
 Payments on long-term debt                     (21,590)       (24,507)

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 Net proceeds from issuance of                                         
   note payable to bank                         300,000         50,000 
 Proceeds from issuance of                                             
   long-term debt                                31,525          -     
 Investment in sales-type leases                 (6,875)       (43,647)
 Proceeds from sales-type leases                 36,937         29,777 
                                            ------------  ------------ 

   Net cash provided by financing                                      
     activities                                 339,997         11,623 
                                            ------------  ------------ 

Net increase (decrease) in cash                 153,005       (392,863)

Cash at beginning of year                       354,884        747,747 
                                            ------------  ------------ 

CASH AT END OF YEAR                         $   507,889    $   354,884 
                                            ============  ============ 

See accompanying notes.                                                         
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INDUSTRIAL SERVICES OF AMERICA, INC.                                            
AND SUBSIDIARY                                                                  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                      

DECEMBER 31, 1995 AND 1994                                                      

=================================================================               

1.   NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING                   
POLICIES                                                              

NATURE OF BUSINESS - Industrial Services of America, Inc.             
(the Company) is engaged in providing products and services           
to meet the waste management needs of its customers related           
to waste equipment sales and rental, scrap recycling,                 
service and consulting, and solid waste disposal.  The                
Company's customers are located throughout the United States          
and Canada.                                                           

CONSOLIDATION - The consolidated financial statements                 
include IES of America, Inc., an inactive wholly-owned                
subsidiary.  All significant intercompany transactions have           
been eliminated.                                                      

ESTIMATES - The preparation of financial statements in                
conformity with generally accepted accounting principles              
requires management to make estimates and assumptions that            
affect the reported amounts of assets and liabilities and             
disclosure of contingent assets and liabilities at the date           
of the financial statements and the reported amounts of               
revenues and expenses during the reporting period.  Actual            
results could differ from those estimates.                            

ACCOUNTS RECEIVABLE - Credit is extended based on an                  
evaluation of the customer's financial condition, and                 
generally collateral is not required.                                 

INVENTORIES - Inventories consist principally of waste                
equipment machinery and parts, and scrap materials held for           
resale and are stated at the lower of cost (first-in, first-          
out method) or market.                                                

PROPERTY AND EQUIPMENT - Property and equipment are stated            
at cost.  Depreciation and amortization is provided using             
the straight-line method over the estimated useful lives of           
the respective assets which range from three to ten years.            
Accelerated depreciation methods are used for income tax              
purposes.                                                             

INCOME TAXES - The Company recognizes deferred tax                    
liabilities and assets for the expected future tax                    
consequences of events that have been included in the                 

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financial statements or tax returns.  Under this method,              
deferred tax liabilities and assets are determined based on           
the difference between the financial statement and tax bases          
of assets and liabilities using enacted tax rates in effect           
for the year in which the differences are expected to                 
reverse.  The significant components of deferred tax                  
provision for income taxes are based on income and expenses           
included in the accompanying statement of operations.                 
Differences between taxes so computed and taxes payable               
under applicable statutes and regulations, when material,             
are classified as deferred taxes arising from timing                  
differences.                                                          

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EARNINGS PER COMMON SHARE - Earnings per common share data            
is based on 1,729,600 weighted shares outstanding during              
1995 and 1994.                                                        

2.   INVENTORIES                                                                

Inventories as of December 31, 1995 and 1994 consist of the           
following:                                                            

                                                                [Download Table]

                                       1995          1994  
                                       ----          ----  

                                                           
Equipment and parts                 $ 61,608      $  73,159
Scrap materials                       76,895         88,052
                                    ---------     ---------

                                    $138,503      $ 161,211
                                    =========     =========

3.   LEASES                                                                     

The Company is the lessor of equipment under sales-type               
leases having terms of three to five years, with the lessees          
having the option to acquire the equipment at the                     
termination of the leases.  All costs associated with this            
equipment are the responsibility of the lessees.                      

Future minimum lease payments receivable for sales-type               
leases as of December 31, 1995 are as follows:                        

                                                                [Download Table]

                                                          
1996                                             $  37,439
1997                                                15,534
1998                                                12,127
1999                                                 4,538
2000                                                 1,537
                                                 ---------

Net minimum lease payments receivable               71,175
Less unearned income                                14,556
                                                 ---------

Net investment in sales-type leases                 56,619
Less current portion                                29,273
                                                 ---------

Long-term portion                                $  27,346
                                                 =========

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The Company also is the lessor of equipment under operating           
leases having terms of one to five years.  All costs                  
associated with this equipment are the responsibility of the          
lessees.  The net investment in equipment leased to                   
customers under noncancelable operating leases as of                  
December 31, 1995 is as follows:                                      

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                                                                [Download Table]

                                                          
Rental equipment                                 $ 633,285
Less accumulated depreciation                      298,914
                                                 ---------

Net rental equipment                             $ 334,371
                                                 =========

Future minimum rentals receivable under noncancelable                 
operating leases as of December 31, 1995 are as follows:              

                                                                [Download Table]

                                                          
1996                                             $ 186,241
1997                                               128,931
1998                                                63,352
1999                                                36,166
2000                                                14,178
                                                 ---------

                                                 $ 428,868
                                                 =========

4.   NET PROPERTY AND EQUIPMENT                                                 

Property and equipment, net as of December 31, 1995 and 1994          
consists of the following:                                            

                                                                [Download Table]

                                      1995         1994    
                                      ----         ----    

                                                           
Equipment and vehicles            $1,763,696    $   858,818
Office equipment                     335,883        235,828
Rental equipment                     633,285        421,683
Leasehold improvements                68,634         13,535
                                  -----------   -----------

                                   2,801,498      1,529,864
Less accumulated depreciation                              
  and amortization                   840,117        588,562
                                  -----------   -----------

Net property and equipment        $1,961,381    $   941,302
                                  ===========   ===========

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5.   INVESTMENT IN AFFILIATE                                                    

In December 1994, the Company entered into an agreement with          
Recycling Data Management Corporation (RDMC) regarding the            
Company's 50% equity interest in Recycleline, Inc.  Under             
this agreement, the Company agreed to assign its interest in          
Recycleline to RDMC.  As part of the agreement, the Company           
absorbed all expenses incurred on behalf of Recycleline               
during 1994 which totaled $37,135. In addition, the Company           
loaned Recycleline $25,000.  The loan bears interest at               
prime (prime was 8.5% at December 31, 1995) and is secured            
by all RDMC outstanding stock.  The loan and accrued                  
interest is payable on December 31, 1999.  In exchange for            
the assignment and the loan, the                                      

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Company received an option to acquire 40% equity interest in          
Recycleline based on its book value at the exercise date.             
The option exercise period extends through December 31,               
1999.                                                                 

During December 1994, the Company wrote off a note                    
receivable from Recycleline totaling $78,877 and its                  
remaining investment in Recycleline totaling $29,129.  These          
amounts are included in other income, net on the Statement            
of Operations.                                                        

6.   LONG-TERM DEBT                                                             

Long-term debt as of December 31, 1995 and 1994 consists of           
the following:                                                        

                                                                [Download Table]

                                      1995         1994    
                                      ----         ----    

                                                           
Note payable to bank              $  350,000     $    -    

Notes payable; interest ranging                            
from 6% to 10.99%; due in monthly                          
installments of principal and                              
interest totaling $2,040 with                              
various maturity dates through                             
May 1997; secured by automobiles                           
with a net book value of                                   
approximately $29,300                 37,228         25,293

Note payable; non-interest                                 
  bearing; unsecured                     -            2,000
                                  ----------     ----------

Total long-term debt                 387,228         27,293
Less current maturities               19,797         14,141
                                  ----------     ----------

Long-term maturities              $  367,431     $   13,152
                                  ==========     ==========

As of December 31, 1995, the Company had borrowed $350,000            
under its $500,000 revolving credit agreement with a                  
financial institution.  This agreement is secured by certain          
assets owned by the Company and affiliated companies,                 
certain rent assignments, certain shares of the Company's             
stock, a life insurance policy on the Company's principal             
stockholder, and any assets held by the financial                     
institution on behalf of the Company.                                 

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In January 1996 the agreement was modified and the available          
revolving credit was increased to $750,000. Interest under            
the agreement, as amended, is payable monthly at the bank's           
prime rate plus .5%.  This agreement is secured by the                
collateral identified above and is guaranteed by the                  
Company's principal stockholder.  This new agreement expires          
June 30, 1997. Accordingly, this note is presented on the             
Balance Sheet as a long-term liability as of December 31,             
1995.                                                                 

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As of December 31, 1995, aggregate maturities of long-term            
debt are as follows:                                                  

                                                                [Download Table]

                                                        
1996                                           $ 19,797 
1997                                            362,075 
1998                                              5,356 
                                               -------- 

                                               $ 387,228
                                               ======== 

7.   COMMITMENTS                                                                

The Company has a noncancelable operating lease agreement             
for certain facilities through 1998.  The lease may be                
renewed by the Company for one successive three year period.          
Rent expense for 1995 and 1994 under this agreement totaled           
$18,442 and $18,000, respectively.  Future minimum rental             
payments under this agreement as of December 31, 1995 are as          
follows:                                                              

                                                                [Download Table]

                                                      
1996                                           $19,327
1997                                            19,327
1998                                            14,496
                                               -------

                                               $53,150
                                               =======

In November 1995 the Company entered into a contract to               
purchase certain equipment for $245,000.  As of December 31,          
1995, the Company's remaining commitment totaled $120,000.            

8.   RELATED PARTY TRANSACTIONS                                                 

The Company enters into various transactions with related             
parties including the Company's principal stockholder and             
affiliated companies which are controlled by the Company's            
principal stockholder.  These transactions primarily involve          
advances from the Company, notes receivable, and leasing of           
Company facilities and vehicles.  A summary of these                  
transactions is as follows:                                           

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                                                                [Download Table]

                                  1995            1994  
                                  ----            ----  

                                                        
Prepaid rent                    $   -          $  29,254
                                =========      =========

Accounts payable -                                      
  affiliated company            $ 226,446      $   -    
                                =========      =========

Rent expense                    $ 268,279      $ 249,361
                                =========      =========

The Company advanced $37,135 in 1994 to Recycleline. During           
December 1994, the Company wrote off these amounts (see               
Note 5).                                                              

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The Company has an agreement with an affiliated company               
owned by the Company's principal stockholder, enabling the            
Company to manage all aspects of the affiliated company's             
scrap recycling operations.  The agreement provides that the          
Company shall retain 60% of the profits from the management           
of the scrap recycling operations commencing July 1, 1994.            
The Company includes revenue from the scrap recycling                 
operations and the related 40% management fee in the                  
Statement of Operations in net sales and costs of sales,              
respectively. The scrap recycling operations generated                
income before provision for income taxes to the Company               
totaling $728,391 in 1995 and $236,330 in 1994. This                  
agreement may be canceled by either party upon prior written          
notice.                                                               

Under certain operating lease agreements with an affiliated           
company owned by the Company's principal stockholder, the             
Company pays monthly payments of $3,750 to lease the                  
Company's main office facility, $6,250 for facilities used            
in the scrap recycling operations, and $12,356 for equipment          
and vehicles used in the scrap recycling operations.                  

9.   INCOME TAXES                                                               

Provision for income taxes consist of the following for the           
years ended December 31, 1995 and 1994:                               

                                                                [Download Table]

                                  1995            1994  
                                  ----            ----  

                                                        
Current:                                                
  Federal                       $ 386,700      $ 196,400
  State and local                  92,700         60,600
                                ---------      ---------

    Current provision             479,400        257,000

Deferred:                                               
  Federal                          31,900         29,300
  State and local                   5,700          -    
                                ---------      ---------

    Deferred provision             37,600         29,300
                                ---------      ---------

Provision for income taxes      $ 517,000      $ 286,300
                                =========      =========

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The difference between the actual provision for income taxes          
and the tax provision computed by applying the statutory              
Federal income tax rate to income before provision for                
income taxes is attributable to the following:                        

                                                                [Download Table]

                                  1995            1994   
                                  ----            ----   

                                                         
Federal income tax at                                    
  statutory rate                $ 415,200      $ 263,700 

Equity in loss of affiliate         -             (7,100)

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                                                                [Download Table]

                                  1995            1994   
                                  ----            ----   

                                                         
State and local income taxes,                            
  net of federal income                                  
  tax effect                    $  63,000      $  40,000 

Effect of tax rate change on                             
  deferred tax assets              13,500        (12,200)

Other differences, net             25,300          1,900 
                                ---------      --------- 

Provision for income taxes      $ 517,000      $ 286,300 
                                =========      ========= 

Deferred tax (liabilities) assets consist of the following            
as of December 31, 1995 and 1994:                                     

                                                                [Download Table]

                                  1995            1994   
                                  ----            ----   

                                                         
Provisions for estimated                                 
  liabilities                   $  17,300      $   -     
Depreciation                      (77,500)       (22,600)
                                ---------      --------- 

Net deferred tax liabilities    $ (60,200)     $ (22,600)
                                =========      ========= 

10.  OTHER INCOME, NET                                                          

Other income, net includes approximately $650,000 in 1994             
resulting from changes in estimates related to costs                  
associated with waste collection and disposal services.               

11.  CONCENTRATION OF CREDIT RISK                                               

As of December 31, 1995 the Company maintains cash deposits           
at a single financial institution of approximately $800,000           
in excess of federally insured limits.                                

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12.  MAJOR CUSTOMER                                                             

Sales to a single customer were approximately 44% and 41% of          
net sales for the years ended December 31, 1995 and 1994,             
respectively.                                                         

13.  RETIREMENT PLAN                                                            

During 1995, the Company sponsored a defined contribution             
retirement plan under Section 401(k) of the Internal Revenue          
Code which covers substantially all employees.  Eligible              
employees may contribute up to 15% of their annual                    
compensation.  Under the plan, the Company matches 10% of             
each employee's                                                       

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voluntary contributions.  Any additional annual matching              
amounts made by the Company are determined by management.             
The Company's matching contributions totaled $31,111 for the          
year ended December 31, 1995.                                         

14.  SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION                          

Cash paid during the year for:                                        

                                                                [Download Table]

                                  1995            1994  
                                  ----            ----  

                                                        
Interest                        $  36,760      $   2,336
Taxes                             583,659        124,934

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SIGNATURES                
----------                

In accordance with Section 13 or 15 (d) of the Exchange Act,          
the Registrant caused this report to be signed on its behalf by                 
the undersigned, thereunto duly authorized.                                     

INDUSTRIAL SERVICES OF AMERICA INC.                                             
-----------------------------------                                             

By:  /s/ Harry Kletter                                                          
-------------------------------                                         
Harry Kletter                                                           
President                                                               

Date:  March 28, 1996                                                           
------------------------------                                        

In accordance with the Exchange Act, this report has been             
signed below by the following persons on behalf of the Registrant               
and in the capacities and on the dates indicated:                               

SIGNATURE            DATE                TITLE                      
----------------------    -------    --------------------------                 

/s/ Harry Kletter         3-28-96    Director, Chief Executive                  
----------------------                                                          
Harry Kletter                        Officer and Chief Financial                
 Officer

/s/ Roberta Kletter       3-28-96    Director and Executive Vice                
----------------------                                                          
Roberta Kletter                      President                                  

/s/ Matthew L. Kletter    3-28-96    Director                                   
----------------------                                                          
Matthew L. Kletter                                                              

/s/ Alan Schroering       3-28-96    Controller (Principal                      
----------------------               Accounting Officer)                        
Alan Schroering                                                                 

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SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS                           
FILED PURSUANT TO SECTION 15(d) OF THE EXCHANGE ACT                             
BY NON-REPORTING ISSUERS                                                        

The Registrant has furnished neither an annual report to              
shareholders covering the fiscal year of the Registrant ended                   
December 31, 1995, nor a proxy statement, form of proxy, on other               
proxy soliciting material for 1996 to its shareholders.  The                    
Registrant intends to furnish to its shareholders such an annual                
report and proxy statement subsequent to the filing of this Form                
10-KSB with the Commission, at which time the Registrant will                   
furnish four (4) copies of such materials to the Commission.                    

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EXHIBITS                      

TO                      

FORM 10-KSB                       

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)                   
OF THE SECURITIES EXCHANGE ACT OF 1934                    

FOR                     

INDUSTRIAL SERVICES OF AMERICA, INC.                  

FOR FISCAL YEAR ENDED                     
DECEMBER 31, 1995                     

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EXHIBIT INDEX               

Exhibit                                                                         
Number                                                       Page               
-------                                                      ----               

3.1       Certificate of Incorporation and Amendments                           
of the Registrant                                           

3.2       By-Laws of the Registrant                                             

27        Financial Data Schedule                                               

                              Exhibit Index Page 1

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CERTIFICATE OF INCORPORATION                
----------------------------                

We, the undersigned, desiring to form a corporation under             
the provisions of Chapter 10096, Acts of the Legislature of the                 
State of Florida, 1925, and all Acts amendatory thereto, hereby                 
make, subscribe and acknowledge before a Notary Public and file                 
with the Secretary of State of the State of Florida certificate                 
of incorporation as follows:                                                    
ARTICLE I.                
The name of the proposed corporation shall be ALSON MFG.              
CO., its business may be carried on throughout the State of                     
Florida and the United States of America as may be authorized by                
its Board of Directors.                                                         
ARTICLE II.               
The general nature of the business of the corporation shall           
be as follows:                                                                  
To manufacture, erect and install prefabricated porches; to           
manufacture, erect and install kitchen cabinets and all types of                
steel shelving and other metal cabinets; to manufacture, assemble               
and install air conditioners and to repair and service all of the               
above and to sell the above, and to act as consultants on any of                
the above, both in the upkeep and servicing of all kinds of                     
equipment, mechanical, electrical, hydraulic and other kindred                  
items; to buy and sell land and buildings; to erect buildings                   
thereon, to acquire leases, and otherwise acquire, own, use and                 
dispose of property of all kinds, real, personal or mixed; to                   
borrow money and give security for same, to give mortgages upon                 
the assets of this corporation when deemed by the Board of                      
Directors expedient so to do and for the performance of such                    
other things as the Board of Directors may deem necessary and                   
proper for the furtherance of the interests of this corporation                 
in the exercise of the powers herein enumerated.                                
ARTICLE III                 
The maximum number of shares of stock which this                      
corporation shall have outstanding at any time shall be fifty                   
(50) shares, each of which shall be of no par value, and each of                
which shall be issued fully paid and non-assessable, and shall be               
payable in lawful money of the United States of America or in                   
services or property at a just valuation to be fixed by the                     
Directors of the corporation, at the organization meeting, or any               
other meeting held for that purpose.                                            
ARTICLE IV                
The amount of capital with which this corporation shall               
begin business will be FIVE HUNDRED ($500.00) DOLLARS.                          
ARTICLE V                 
This corporation shall have perpetual existence.                      
ARTICLE VI.               
The principal place of business of this corporation shall             
be in the City of Miami, Dade County, Florida, or any other City,               
County or State which the Board of Directors may authorize.                     
ARTICLE VII                 
The Board of Directors of this corporation shall consist of           
not less than three (3) and not more than five (5) directors.                   

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ARTICLE VIII                
The names and post office addresses of the officers and of            
the First Board of Directors of this corporation, who shall hold                
office for the first year of its existence, or until their                      
successors are elected and qualified, are as follows:                           
Secretary -- DANIEL NEAL HELLER; 239 Shoreland Bldg., Miami, Fla.               
CATHERINE P. O'BRIEN, 239 Shoreland Bldg., Miami, Fla.
HERBERT M. KLEIN, 239 Shoreland Bldg., Miami, Fla.    
Treasurer -- Ralph Garbett          President -- Allen Garbett                  
ARTICLE IX                
The names and post office addresses of the subscribers to this        
Certificate of Incorporation, and the number of shares each                     
agree to take are as follows:                                                   
DANIEL NEAL HELLER, 239 Shoreland Bldg., Miami, Fla. 18 shares        
CATHERINE P. O'BRIEN, 239 Shoreland Bldg., Miami, Fla. 16 shares      
HERBERT M. KLEIN, 239 Shoreland Bldg., Miami, Fla. 16 shares          
ARTICLE X               
The management and control of the business of the                     
corporation shall be conducted under the direction of the Board                 
of Directors of the following officers, who shall be elected by                 
the Board of Directors, to wit, a President, one or more Vice-                  
Presidents, a Treasurer and a Secretary, provided that any one or               
more of said offices may be held by the same person, except that                
the office of President shall not be held by the Secretary, or                  
Assistant Secretary of the corporation.                                         
IN WITNESS WHEREOF, the incorporators have hereunto set               
their respective hands and seals this 30th day of September,                    
1953.                                                                           

               /s/ Daniel Neal Heller       (SEAL)
         -----------------------------

               /s/ Catherine P. O'Brien     (SEAL)
         -----------------------------

               /s/ Herbert M. Klein         (SEAL)
         -----------------------------

STATE OF FLORIDA    )                                                           
SS                                  
COUNTY OF DADE      )                                                           

I HEREBY CERTIFY that on this day personally appeared                 
before me, an office duly authorized to administer oaths and take               
acknowledgements, DANIEL NEAL HELLER, CATHERINE P. O'BRIEN, and                 
HERBERT M. KLEIN, to me well known to be the persons described in               
and who executed the foregoing instrument, and they acknowledged                
before me that they executed the same freely and voluntarily for                
the purposes therein expressed.                                                 

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WITNESS my hand and official seal at Miami, County of Dade            
and State of Florida, this 30th day of September, 1953.                         

/s/ Lisa M. Perry   
              ----------------------------------
NOTARY PUBLIC       
     State of Florida at Large
          My commission expires: 9-16-56

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CERTIFICATE OF AMENDMENT              

OF              

CERTIFICATE OF INCORPORATION              

OF              

ALSON MFG. CO.              
----------------------------              

ALSON MFG. CO., a Florida corporation, under its corporate            
seal and the hands of its President, LARRY GARBETT, and                         
Secretary, ANNE COWLEY, hereby certifies that:                                  
I.                
The Board of Directors of said corporation at a meeting               
called and held on July 17, 1961, adopted the following                         
resolutions:                                                                    
BE IT RESOLVED by the Board of Directors of ALSON MFG. CO.,           
that said Board deems it advisable and hereby declares it to be                 
advisable that Article III of the Certificate of Incorporation be               
amended so as to read as follows:                                               
The maximum number of shares of stock that                  
this corporation is authorized to have                      
outstanding at any one time is Five Hundred                 
Thousand (500,000) shares of Common voting                  
stock of the par value of $.01 per share.                   

BE IT FURTHER RESOLVED by the Board of Directors of ALSON             
MFG. CO., that said Board deems it advisable and hereby declares                
it to be advisable that Article VII of the Certificate of                       
Incorporation be amended so as to read as follows:                              
The number of its directors shall be not                    
less than three but the bylaws may provide                  
for an increase in the number of directors.                 

BE IT FURTHER RESOLVED by the Board of Directors of ALSON             
MFG. CO., that the said Board deems it advisable and hereby                     
declares it to be advisable to amend the Certificate of                         
Incorporation of the corporation by the addition of Articles XI,                
XII and XIII, each Article reading as follows:                                  
ARTICLE XI:  No stockholder shall be entitled as a          
matter of right to subscribe for or receive additional      
shares of any class of stock of the corporation,            
whether now or hereafter authorized, or any bonds,          
debentures or other securities convertible into stock,      
but such additional shares of stock or other                
securities convertible into stock may be issued or          
disposed of by the Board of Directors to such persons       
and on such terms as in its discretion it shall deem        
advisable.                                                  

ARTICLE XII:  The corporation shall indemnify any and       
all of its directors or officers or former directors        
or officers or any person who may have served at its        
request as a director or officer of another                 
corporation in which it owns shares of capital stock        
or of which it is a creditor against expenses actually      

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and necessarily incurred by them in connection with         
the defense of any action, suit or proceeding in which      
they, or any of them, are made parties, or a party by       
reason of being or having been directors or officers        
or a director or officer of the corporation, or of          
such other corporation, except in relation to matters       
as to which any such director or officer or former          
director or officer of person shall be adjudged in          
such action, suit or proceeding to be liable for            
negligence or misconduct in the performance of duty.        
Such indemnification shall not be deemed exclusive of       
any other rights to which those indemnified may be          
entitled, under any by-laws, agreement, vote of             
stockholders, or otherwise.  The right of                   
indemnification hereinabove stated shall under no           
circumstances extend to or include indemnification for      
liabilities arising under the Securities Act of 1933,       
as amended.                                                 

ARTICLE XIII:  No contract or other transaction             
between the corporation and any other corporation,          
firm or individual shall be affected or invalidated by      
the fact that any one or more of the directors or           
officers of this corporation is or are interested in        
or is a director or officer, or are directors or            
officers of such other corporation, or a member of          
such firm, and any director or directors, or officer        
or officers, individually or jointly, may be a party        
or paries to or may be interested in any contract, or       
transaction, of this corporation or in which this           
corporation is interested, and no contract, act or          
transaction of this corporation with any person or          
persons, firms or corporations, shall be affected or        
invalidated by the fact that any director or                
directors, or officer or officers, of this corporation      
is a party, or are parties, to or interested in such        
contract, act or transaction, or in any way connected       
with such person or persons, firm or corporation, and       
each and every person who may become a director or          
officer of this corporation is hereby relieved from         
any liability that might otherwise exist from               
contracting with the corporation for the benefit of         
himself or any firm or corporation in which he may be       
in anywise interested.                                      

BE IT FURTHER RESOLVED by the Board of Directors that a               
special meeting of the stockholders of record entitled to vote                  
for the consideration of said amendments be, and the same is                    
hereby called to be held in Miami, Florida, on August 14, 1961 at               
10 o'clock in the forenoon.                                                     
II.               
The meeting of the stockholders of the corporation called             
to be held by the Board of Directors, as aforesaid, was held on                 
August 2, 1961, and at said meeting of the stockholders said                    
amendments to the Certificate of Incorporation were duly adopted                
by the unanimous vote of all the stockholders.                                  

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IN WITNESS WHEREOF, said corporation has caused this                  
Certificate to be signed in its name by its President and its                   
corporate seal to be hereunto affixed and attested by its                       
Secretary, this, the 16 day of August, 1961.                                    
ALSON MFG. CO.      

By /s/ Larry Garbett
                 -------------------------------
                                   President
ATTEST:                                                                         

/s/ Anne Cowley Garbett                                                         
--------------------------                                                      
Secretary                                                   

STATE OF FLORIDA    )                                                           
SS:                                 
COUNTY OF DADE      )                                                           

On this day personally appeared before me, the undersigned            
officer duly authorized by the laws of the State of Florida to                  
take acknowledgments, LARRY GARBETT, President of ALSON MFG. CO.,               
a Florida corporation, and acknowledged that he executed the                    
above and foregoing Certificate of Amendment as such officer for                
and on behalf of such corporation after having been duly                        
authorized to do so; also personally appeared before me, at the                 
same time, ANNE COWLEY GARBETT, Secretary of said corporation,                  
and acknowledged that she attested the foregoing Certificate of                 
Amendment as such officer for and on behalf of said corporation                 
after having been duly authorized to do so.                                     
WITNESS my hand and official seal at Miami, Dade County,              
Florida, this 16 day of August, 1961.                                           

/s/                 
              ----------------------------------
              Notary Public, State of Florida at
Large               

          My Commission expires: 1-15-65

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CERTIFICATE OF AMENDMENT                
TO THE              
CERTIFICATE OF INCORPORATION              
ALSON MFG. CO.            
-------------------------------             

ALSON MFG. CO., a Florida corporation, under its corporate            
seal and the hands of its President, LAWRENCE GARBETT, and its                  
Secretary, DONALD GARBETT, hereby certifies that:                               
The Board of Directors and all Stockholders of said                   
Corporation, at a Joint Meeting duly called in Miami, Florida, on               
January 13, 1969, unanimously adopted the following resolutions:                
RESOLVED:  That Article I of the Certificate                
of Incorporation of ALSON MFG. CO. be                       
deleted in its entirety and the following be                
substituted therefor:                                       

ARTICLE I               

"That the name of this corporation is:            

ALSON MFG. CO., INC.                

RESOLVED:  That Article II of the                           
Certificate of Incorporation be deleted in                  
its entirety and the following be                           
substituted therefor:                                       

ARTICLE II                

"That the general nature of the business to be    
transacted by this Corporation shall be as follows:         
A.   To design, manufacture, fabricate, acquire,  
buy, sell, and in any manner dispose of,
  lease, repair, erect, connect, install and
generally deal and trade in and with    
lighting fixtures, electrical fixtures, 
electrical lighting fixtures, electric  
machinery, electric devices and general 
    electric equipment, appliances, specialties,
  merchandise, parts, supplies and materials
of every nature and description, and to 
design, manufacture, fabricate, acquire,
   buy, sell and dispose of in any manner, and
generally deal in any and all machinery,
    equipment, apparatus, articles, goods, wares
   and merchandise suitable in connection with
the foregoing objects.                  

B.   To acquire, by purchase or otherwise, for    
  investment or resale, and to own, operate,
    subdivide, map or plat, lease, let, mortgage
   and sell, or otherwise dispose of, for cash
  or on credit, by conveyance, agreement for
  deed, or other appropriate instrument, and
    generally, to deal and traffic as the owner,
    or as agent or broker, in real, personal and
  mixed property, and any interest or estate
therein, including subdivisions, hotels,

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apartment houses or business houses,    
factories and warehouses, residences,   
   estates and manufacturing sites and any lot
or parcel of land upon which they are   
 located; and to create, own, lease, sell,
  operate and deal in freehold and leasehold
    estates of any and all character whatsoever,
  and in connection therewith, to own, lease
    and operate auto-bus lines or other means of
  conveyance; and to manufacture, buy, sell,
exchange, and generally, for cash or on 
  credit, to deal at wholesale or at retail,
   as agent, broker or owner, in goods, wares,
    and merchandise, and other personal property
of all description whatsoever.          

C.   To engage in the business of a contractor    
    and builder, and to erect, plan, outline and
    conceive of all manner of structures, and to
do all and every act necessary and      
    consistent with the work of a contractor and
builder.                                

D.   To carry on business in the United States or 
 elsewhere, as factors, agents, commission
merchants or merchants to buy, sell,    
  manipulate and deal in, at wholesale or at
retail, any merchandise, goods, wares,  
    products and commodities of every sort, kind
 or description, and to carry on any other
business, whether manufacturing or      
    otherwise, which can be conveniently carried
    on with any of the corporation's objects; to
   open stores, offices or agencies throughout
   the United States or elsewhere, or to allow
 or cause the legal estate and interest in
any properties or business required,    
  acquired, established or carried on by the
   corporation to remain in or to be vested in
the name of, or carried on by any other 
corporation formed or to be formed, and 
either upon trust for, or as agents or  
   nominees of this corporation, and to manage
 the affairs or take over and carry on the
business of any such other corporation  
   formed or to be formed, and to exercise all
or any of the powers of any such        
corporation, or of holders of shares of 
   stock or securities thereof, and to receive
  and to distribute as profits the dividends
and interest on such shares of stock and
    securities; to purchase or otherwise acquire
and undertake, all or any part of the   
 business, property and liabilities of any
persons or corporations, to carry on any
  kind of business which this corporation is
authorized to carry on; to enter into   
   partnership or take or make any arrangement
for sharing profits, union of interests,

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 reciprocal concessions, or cooperate with
any person or corporation carrying on or
 about to carry on any business which this
 corporation is authorized to carry on, or
    any business or transaction capable of being
   conducted so as, directly or indirectly, to
benefit this corporation.               

E.   To guarantee, to acquire by purchase,        
subscription, or otherwise, hold for    
investment, or otherwise, sell, assign, 
transfer, mortgage, pledge or otherwise 
  dispose of the shares of the capital stock
    of, or any bonds, securities or evidences of
indebtedness created by any other       
   corporation or corporations of the State of
  Florida, or any other state or government,
   domestic or foreign; and while the owner of
any such stocks, bonds, securities and  
  evidences of indebtedness, to exercise all
the rights, powers and privileges of    
ownership, including the right to vote  
   thereon for any and all purposes; to aid by
loan, subsidy, guaranty or in any other 
   manner whatsoever so far as the same may be
permitted in the case of corporations   
    organized under the General Corporation Laws
of the State of Florida, any corporation
whose stocks, bonds, securities or other
   obligations are or may be in any manner and
  at any time owned, held or guaranteed, and
  to do any and all other acts or things for
    the preservation, protection, improvement or
enhancement in value of any such stocks,
   bonds, securities or other obligations; and
to do all and any such act or things    
designed to accomplish any such purpose.

F.   To acquire in any manner, enjoy, utilize,    
hold, sell, assign, lease, mortgage or  
   otherwise dispose of, letters patent of the
United States or of any foreign country,
patents, patent rights, licenses and    
privileges, inventions, improvements and
   processes, copyrights, trademarks and trade
names or pending applications therefor, 
    relating to or useful in connection with any
business of the corporation or any other
   corporation in which the corporation has or
may have an interest as a stockholder or
otherwise.                              

G.   To borrow money and contract debts when      
necessary for the transaction of its    
business or for the exercise of its     
   corporate rights, privileges or franchises,
or for any other lawful purpose of its  
 incorporation; to issue bonds, promissory
notes, bills of exchange, debentures and

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other obligations and evidences of      
   indebtedness payable at a specified time or
 times, or payable upon the happening of a
specified event or events, secured or   
unsecured, from time to time, for moneys
borrowed, or in payment for property    
 acquired, for any of the other objects or
 purposes of the corporation or for any of
  the objects of its business; to secure the
 same by mortgage or mortgages, or deed or
    deeds of trust, or pledge or other lien upon
any or all of the property, rights,     
    privileges or franchises of the corporation,
wheresoever situated, acquired or to be 
   acquired; and to confer upon the holders of
   any debentures, bonds or other evidences of
   indebtedness of the corporation, secured or
unsecured, the right to convert the     
principal thereof into any preferred or 
common stock of the corporation now or  
 hereafter authorized, upon such terms and
    conditions as shall be fixed by the Board of
Directors; to sell, pledge or otherwise 
 dispose of any or all debentures or other
  bonds, notes and other obligations in such
  manner and upon such terms as the Board of
Directors may deem judicious, subject,  
    however, to the provisions of the By Laws of
the corporation."                       

RESOLVED:  That Article III of the Certificate of                     
Incorporation of the Corporation be deleted in its                    
entirety and the following be substituted therefor:                   

ARTICLE III               

"The corporation is authorized to issue two million         
(2,000,000) shares of common voting stock of the par value            
of one cent ($.01) per share.  The corporation is                     
prohibited from the issuance of any non-voting stock.                 
"The corporation shall have the full power and lawful       
authority to accept property, real, personal and mixed,               
labor and services, in payment of shares of its capital               
stock, in lieu of cash, at a just valuation, to be fixed by           
its Board of Directors.                                               
"The shares of the capital stock of the corporation,        
when certificates thereof shall be issued, shall be fully             
paid and non-assessable.                                              
"Shares of the capital stock of the corporation shall       
be transferred only on the books of the corporation by the            
holder thereof in person, or by his attorney, upon the                
surrender and cancellation of a certificate or certificates           
for like number of shares."                                           
RESOLVED:  That Article VII of the Certificate of                     
Incorporation be deleted in its entirety and the                      
following substituted therefor:                                       

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ARTICLE VII               

"That the business of the corporation shall be              
conducted by a Board of Directors which shall consist of              
not less than three (3) nor more than nine (9) members, as            
the same may be provided by the By Laws of the corporation."          
IN WITNESS WHEREOF, said corporation has caused this                  
Certificate of Amendment to be signed in its name by its                        
President and its corporate seal to be hereunto affixed and                     
attested by its Secretary, this 13th day of January, 1969.                      

(CORPORATE SEAL)                   ALSON MFG. CO.                               

ATTEST: /s/ Donald Garbett         By: /s/ Lawrence Garbett                     
-----------------------         -------------------------         
-                                                                               
Donald Garbett,                Lawrence Garbett, President        
Secretary                                                         

STATE OF FLORIDA    )                                                           
: ss.                                   
COUNTY OF DADE      )                                                           

On this day personally appeared before me, the undersigned            
officer, duly authorized by the laws of the State of Florida to                 
take acknowledgments of deeds, LAWRENCE GARBETT and DONALD                      
GARBETT, President and Secretary, respectively, of ALSON MFG.                   
CO., a Florida corporation, and acknowledged that they executed                 
the above and foregoing Certificate of Amendment of the                         
Certificate of Incorporation of ALSON MFG. CO., as such officers,               
for and on behalf of said corporation, after having been duly                   
authorized to do so.                                                            
WITNESS my hand and official seal at Miami, Dade County,              
Florida, this 13th day of January, 1969.                                        
/s/                 
              ----------------------------------
NOTARY PUBLIC       
     State of Florida at Large

My commission expires: 9-4-69                                         

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CERTIFICATE OF AMENDMENT TO                 
CERTIFICATE OF INCORPORATION                
OF ALSON MFG. CO., INC.                 
----------------------------                

ALSON MFG. CO., INC., a Florida corporation, under its                
corporate seal and the hands of its President, Lawrence Garbett,                
and its Secretary, Donald Garbett, hereby certifies that:                       
1.   The Board of Directors of said corporation, at a                 
Special Meeting duly called in Miami, Florida, on May 15, 1970,                 
unanimously adopted the following resolution:                                   
RESOLVED:  That Article I of the Certificate of                   
Incorporation of Alson Mfg. Co., Inc. be deleted in its               
entirety and the following be substituted therefor:                   
"ARTICLE I                
"That the name of this corporation is:  ALSON INDUSTRIES,         
INC."                                                             

2.   The Annual Meeting of Stockholders of the corporation            
was called and held on July 24, 1970, to consider the resolution                
hereinabove set forth and at said Annual Meeting of Stockholders                
the said amendment to the Certificate of Incorporation was                      
adopted by the unanimous vote of all stockholders present in                    
person and by proxy, who represented a majority of the issued and               
outstanding common stock of said corporation.                                   
IN WITNESS WHEREOF, said corporation has caused this                  
Certificate to be signed in its name by its President and its                   
corporate seal to be hereunto affixed and attested by its                       
Secretary this 24th day of July, 1970.                                          

ALSON MFG. CO., INC.

   By /s/ Lawrence Garbett
                 -------------------------------
            Lawrence Garbett
               President

[CORPORATE SEAL]                                                                

Attest: /s/ Donald Garbett                                                      
-----------------------                                         
Donald Garbett                                          
Secretary                                         

STATE OF FLORIDA    )                                                           
: ss.                                   
COUNTY OF DADE      )                                                           

BEFORE ME, the undersigned authority, on this 24th day of             
July, 1970, personally appeared LAWRENCE GARBETT and DONALD                     
GARBETT, President and Secretary, respectively, of ALSON MFG.                   
CO., INC., who, being first duly sworn, acknowledged that they                  
executed the foregoing Certificate of Amendment to Certificate of               
Incorporation of Alson Mfg. Co., Inc., as such officers, for and                
on behalf of said corporation, after having been duly authorized                
to do so.                                                                       

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WITNESS my hand and seal at Miami, Dade County, Florida,              
this 24th day of July, 1970.                                                    
/s/                 
            --------------------------------
NOTARY PUBLIC       
     State of Florida at Large

My commission expires:                                                          

September 4, 1978                                                               

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ARTICLES OF AMENDMENT                 
---------------------                 
TO THE                
------                
ARTICLES OF INCORPORATION                 
-------------------------                 
OF                
--                
ALSON INDUSTRIES, INC.                  
----------------------                  

Pursuant to the provisions of Sections 607.177, 607.181, and          
607.187 of the Florida General Corporation Act (Chapter 607 of                  
the Florida Statutes), the Articles of Amendment to the Articles                
of Incorporation of Alson Industries, Inc. ("Corporation") are                  
hereby adopted:                                                                 
1)   The name of the Corporation is Alson Industries, Inc.            
2)   The Amendments to the Articles of Incorporation adopted          
are as follows:                                             
ARTICLE I               
---------               

Article I of the Articles of Incorporation is amended so              
that the name of the Corporation is now and hereafter Industrial                
Services of America, Inc.                                                       
ARTICLE II                
----------                

Article II of the Articles of Incorporation of the                    
Corporation are amended to include the additional business                      
purposes of the Corporation as follows:                                         
To engage in the business of consulting with large                    
corporations for their waste management problems; to                  
manufacture, purchase, and resell various types of waste              
management equipment; the leasing, servicing, manufacturing,          
and purchase and reselling of parts for said equipment; to            
buy and sell land and buildings; to erect buildings thereon,          
to acquire leases, and otherwise acquire, own, use, and               
dispose of property of all kinds, real, personal, or mixed;           
to borrow money and give security for same, to give                   
mortgages upon the assets of this Corporation when deemed by          
the Board of Directors expedient so to do for the                     
performance of such other things as the Board of Directors            
may deem necessary or proper for the furtherance of the               
interests of this Corporation in the exercise of the powers           
enumerated; and to engage in any and all other business               
activities authorized by law.                                         

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ARTICLE III               
-----------               

Article III of the Articles of Incorporation of the                   
Corporation is amended as follows:                                              
The maximum number of shares of Common Voting Stock that              
this Corporation is authorized to have outstanding at any             
one time is ten million (10,000,000) shares of the par value          
of one cent ($.01) per share.                                         

The Corporation is also authorized to issue two hundred               
thousand (200,000) shares of Non-Voting Preferred Stock               
having a par value of Ten Dollars ($10.00) per share.                 

The Preferred shares may be issued from time to time in one           
or more series.                                                       

The Board of Directors is hereby authorized to fix or alter           
the designations, preferences, and relative, participating,           
optional, or other special rights and qualifications,                 
limitations, or restrictions of such preferred shares,                
including, without limitation of the generality of the                
foregoing, dividend rights, dividend rates, conversion                
rights, voting rights, rights and terms of redemption                 
(including sinking fund provisions), the redemption price or          
prices and liquidation preferences of any wholly unissued             
series of preferred shares, and the number of shares                  
constituting any such series and the designation thereof, or          
any of them; and to increase or decrease the number of                
shares of that series, but not below the number of shares of          
such series then outstanding.  In case the number of shares           
of any series shall be so decreased, the shares constituting          
such decreases shall resume the status which they had prior           
to the adoption of the resolution originally fixing the               
number of shares of such series.                                      

In all other particulars, the Articles of Incorporation of            
the Corporation, as previously amended, remain unaltered.                       
Harry Kletter and Roberta Kletter do hereby certify that              
they are the President and Assistant Secretary, respectively, of                
Alson Industries, Inc., a Florida corporation; that at a duly                   
called special meeting of the shareholders of the Corporation                   
held on July 10, 1984, pursuant to notice duly sent to all                      
shareholders entitled to vote at that meeting, and with a quorum                
present, the said shareholders, by at least a majority of the                   
number of shares entitled to vote, adopted the foregoing Articles               
of Amendment to the Articles of Incorporation of Alson                          
Industries, Inc.                                                                
IN TESTIMONY WHEREOF, Harry Kletter and Roberta Kletter,              
President and Assistant Secretary, respectively, of the                         
Corporation, have executed these Articles of Amendment on behalf                
of the Corporation and Harry Kletter, the President of the                      
Corporation, has acknowledged these Articles of Amendment this                  
17th day of July, 1984.                                                         

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ALSON INDUSTRIES, INC.      

By: /s/ Harry Kletter       
         -------------------------------
  Harry Kletter, President

By: /s/ Roberta Kletter     
         -------------------------------
Roberta Kletter,      
Assistant Secretary   

STATE OF KENTUCKY                                                               
COUNTY OF JEFFERSON                                                             

The undersigned, a Notary Public in and for the State and             
County aforesaid, does hereby certify that on this date, Harry                  
Kletter signed the foregoing Articles of Amendment to the                       
Articles of Incorporation of Alson Industries, Inc., before me                  
and acknowledged the name as his true act and deed on behalf of                 
the Corporation and swore the same to be true.                                  

My commission expires:  Jan. 26, 1987.                                

IN TESTIMONY WHEREOF, witness my signature this 17th day of           
July, 1984.                                                                     

(SEAL)                        /s/ Roberta Kletter                               
              ----------------------------------
           Notary Public, Jefferson County
Kentucky            

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ARTICLES OF MERGER                
------------------                

Pursuant to the provisions of Section 607.224 of the Florida          
General Corporation Act the undersigned domestic and foreign                    
corporations have adopted the following Articles or Merger for                  
the purpose of merging Computerized Waste, Inc. into Industrial                 
Services of America, Inc.:                                                      
1)   The names of the constituent corporations and the states                   
under the laws of which each is organized are:                                  
NAME OF CORPORATION                     STATE                         
-------------------                     -----                         

Industrial Services of America, Inc.   Florida                        

Computerized Waste, Inc.               Massachusetts                  

2)   The laws under which such foreign corporation is organized                 
permit such merger pursuant to the Annotated Laws of                            
Massachusetts, Chapter 156B, Sections 78 and 79.                                
3)   The name of the surviving Corporation is Industrial Services               
of America, Inc. and it is to be governed by the laws of the                    
State of Florida.                                                               
4)   Each outstanding share of Computerized Waste, Inc. Common                  
Voting Stock, no par value per share shall be exchanged for one                 
thousand (1000) shares of Industrial Services of America, Inc.                  
Common Voting Stock, having a par value of one cent ($.01) per                  
share.                                                                          
5)   The plan of merger was adopted by the shareholders of                      
Industrial Services of America, Inc. on December 19, 1984, in the               
manner prescribed for in Section 607.221 of the Florida General                 
Corporation Act and was adopted by the shareholders of                          
Computerized Waste, Inc. on December 31, 1984 in the manner                     
prescribed by the laws of Massachusetts, the state under which it               
was organized.                                                                  
6)   No changes have been made in the Articles of Incorporation                 
of Industrial Services of America, Inc., the surviving                          
corporation, as a result of this merger.                                        
7)   The effective date of the merger is January 1, 1985.                       

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Dated December 31, 1984.                                                        
              Industrial Services of America, Inc.

/s/ Harry Kletter     
                 ---------------------------------------
       By:  Harry Kletter, President

/s/ Roberta Kletter     
               ---------------------------------------
       By:  Roberta Kletter, Secretary

Computerized Waste, Inc.

/s/ Harry Kletter       
               ---------------------------------------
     By:  Harry Kletter, President

/s/ Joseph D. Freedman  
               ---------------------------------------
          By:  Joseph D. Freedman, Secretary

State of Kentucky   )                                                           
)                                       
County of Jefferson )                                                           

The foregoing instrument was acknowledged before me this 31st day               
of December, 1984, by Harry Kletter, President and Roberta                      
Kletter, Secretary on behalf of Industrial Services of America,                 
Inc. and by Harry Kletter, President of Computerized Waste, Inc.                
on behalf of said corporation.                                                  

         /s/ Roberta Kletter
                   -----------------------------
   Notary Public

(SEAL)                                                                          
My Commission Expires:  1-26-87         

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BY-LAWS               

ALSON MFG. CO., INC.                
--------------------                

(A Florida Corporation)               

ARTICLE I               
---------               

Offices               
-------               

SECTION 1.  HOME OFFICE.  The home office shall be          
---------   -----------                                     
2690 N.E. 191st Street, Miami, Florida.                                         

SECTION 2.  PRINCIPAL OFFICE.  The principal office         
---------   ----------------                                
shall be 2690 N.E. 191st Street, Miami, Florida.                                

SECTION 3.  OTHER OFFICES.  The corporation may also        
---------   -------------                                   
have an office or offices at such other place or places within or               
without the State of Florida as the Board of Directors may, from                
time to time, designate or the business of the Corporation may                  
require.                                                                        

ARTICLE II                
----------                

Stockholders' Meetings                
----------------------                

SECTION 1.  ANNUAL MEETING.  The annual meeting of the      
---------   --------------                                  
stockholders of the corporation, shall be held at the office of                 
the Corporation in the State of Florida, or at such other place                 
within or without the State of Florida as may be determined by                  
the Board of Directors and as shall be designated in the notice                 
of said meeting, on the Third Tuesday in the month of May of each               
year (or if said day be a legal holiday) the on the next                        
succeeding day not a legal holiday), at 10:00 o'clock in the                    
forenoon, for the purpose of electing directors for the ensuing                 
year, and for the transaction of such other business as may be                  
properly brought before the meeting, unless the Board of                        
Directors previously shall have fixed a different date for the                  
meeting.                                                                        

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SECTION 2.  SPECIAL MEETING.  Special meeting of stock-     
---------   ---------------                                 
holders other than those regulated by statute, may be called at                 
any time by a majority of directors.  Notice of such meeting                    
stating the purpose for which it is called shall be served                      
personally or by mail, not less than ten (10) days before the                   
date set for such meeting.  If mailed, it shall be directed to a                
stockholder at his address as it appears on the stock book; but                 
at any meeting at which all stockholders shall be present, or of                
which stockholders not present have waived notice in writing, the               
giving of notice as above described may be dispensed with.  The                 
Board of Directors shall also, in like manner, call a special                   
meeting of stockholders whenever so requested in writing by                     
stockholders representing not less than a majority of the capital               
stock of the company.  No business other than that specified in                 
the call for the meeting, shall be transacted at any meeting of                 
the stockholders.                                                               
SECTION 3.  NOTICE AND PURPOSE OF MEETINGS.  Notice of      
---------   ------------------------------                  
the purpose or purposes and of the time and place within or                     
without the State of Florida of every meeting of stockholders,                  
annual or special, shall be given in accordance with the Laws of                
the State of Florida, and shall be in writing and signed by the                 
President, Vice-President or the Secretary, and a copy thereof                  
shall be served either personally or by mail or by any other                    
lawful means, not less than ten (10) days before the meeting,                   
upon each stockholder of record entitled to vote at such meeting.               
If mailed, such notice shall be directed to each stockholder at                 
his address, as it appears on the stock book; unless he shall                   
have filed with the Secretary of the corporation a written                      
request that notices intended for him be mailed to some other                   
address, in which case it shall be mailed or transmitted to the                 
address designated in such request.  Except as otherwise                        
expressly provided by statute, no publication of any notice of a                
meeting of stockholders shall be required to be given to any                    
stockholder who shall, in person or by attorney thereunto                       
authorized, waive such notice in writing or by telegraph, cable,                
radio or wireless either before or after such meeting.  Except                  
where otherwise required by law, notice of any adjourned meeting                
of the stockholders of the corporation shall not be required to                 
be given.  However, stockholders holding one-half of the                        
outstanding stock may execute a written waiver of any and all                   
notices, and when such waiver is had, the proceedings of such                   
meeting shall be as valid and binding as though the meeting were                
legally called.                                                                 
SECTION 4.  QUORUM.  A quorum at all meetings of stock-     
---------   ------                                          
holders shall consist of the holders of record of a majority of                 
the shares of the Common Stock of the corporation, issued and                   
outstanding, entitled to vote at the meeting, present in person                 
or by proxy, except as otherwise provided by law or the                         
Certificate of Incorporation.                                                   
In the absence of a quorum at any meeting or any            
adjournment thereof, a majority of the Common stockholders                      
present in person or by proxy and entitled to vote may adjourn                  
such meeting from time to time.  At any such adjourned meeting at               
which a quorum is present, any business may be transacted which                 
might have been transacted at the meeting as originally called.                 

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SECTION 5.  ORGANIZATION.  Meetings of the stockholders     
---------   ------------                                    
shall be presided over by the President, or if he is not present,               
by the Secretary, or if neither the President nor the Secretary                 
is present, by a Vice-President or by a Chairman to be chosen by                
a majority of the common stockholders entitled to vote who are                  
present in person or by proxy at the meeting.  The Secretary of                 
the corporation, or should he be absent or serve as Chairman, a                 
Vice-President or an Assistant Secretary, shall act as Secretary                
of every meeting, but if neither the Vice-President nor an                      
Assistant Secretary is present, the Chairman shall choose any                   
person present to act as Secretary of the meeting.                              
At the annual meeting of stockholders the order of          
business, subject to change directed by the Chairman or voted by                
the stockholders, shall be as follows:                                          
1.   Calling Meeting to Order                               
2.   Proof of Notice of Meeting                             
3.   Reading of Minutes of last previous annual             
meeting.                                                                        
4.   Reports of Officers                                    
5.   Reports of committees                                  
6.   Election of directors                                  
7.   Miscellaneous business                                 

SECTION 6.  VOTING.  Except as otherwise provided in        
---------   ------                                          
the By-Laws, the Certificate of Incorporation, or by the Laws of                
the State of Florida, at every meeting of the stockholders, each                
stockholder of the corporation entitled to vote at such meeting                 
shall have one vote in person or by proxy for each share of stock               
held by him and registered in his name on the books of the                      
corporation at the time of such meeting.  Any vote on stock of                  
the corporation may be given by the stockholder entitled thereto                
in person or by his proxy appointed by an instrument in writing,                
subscribed by such stockholder or by his attorney thereunto                     
authorized and delivered to the Secretary of the meeting;                       
provided, however, that no proxy shall be noted on after three                  
(3) years from its date unless said proxy provides for a longer                 
period.  Except as otherwise required by statute, by the                        
Certificate of Incorporation or these By-Laws, elections of                     
Directors and all other elections and voting with regard to any                 
corporate matters coming before any meeting of the stockholders                 
shall be decided by vote of a plurality in interest of the                      
stockholders of the corporation present in person or by proxy at                
such meeting, and entitled to vote thereat, a quorum being                      
present.                                                                        
SECTION 7.  LIST OF STOCKHOLDERS.  A complete list of       
---------   --------------------                            
the stockholders entitled to vote at the ensuing election, and                  
the number of voting shares held by each shall be made available                
at the meeting by the Secretary, or other officer of the                        
corporation and such list may be prepared by the company or the                 
Transfer Agent and shall, during the whole time of said election,               
be open to the examination of any inspectors of election.                       

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SECTION 8.  INSPECTORS OF ELECTION.  At all elections       
---------   ----------------------                          
of directors, or in any other case in which inspectors may act,                 
two inspectors of election shall be appointed by the chairman of                
the meeting, except as otherwise provided by the law.  The                      
inspectors of election shall take and subscribe on oath                         
faithfully to execute the duties of inspectors at such meeting                  
with strict impartiality, and according to the best of their                    
ability, and shall take charge of the polls and after the vote                  
shall have been taken, shall make certificate of the result                     
thereof, but no director or candidate for the office of directors               
shall be appointed as such inspector.  If there be a failure to                 
appoint inspectors or if any inspector appointed be absent or                   
refuse to act, or if his office becomes vacant, and should the                  
Chairman not appoint said inspectors, the stockholders present at               
the meeting, by a per capita vote, may choose temporary                         
inspectors of the number required.                                              
ARTICLE III               
-----------               

DIRECTORS               
---------               

SECTION 1.  POWERS, NUMBER, QUALIFICATIONS, TERMS,          
---------   --------------------------------------          
QUORUM AND VACANCIES.  The property, affiars and business of the                
--------------------                                                            
corporation shall be managed by its Board of Directors,                         
consisting of three (3) persons or more, as hereinafter provided.               
Except as hereinafterprovided, directors shall be elected at the                
annual meeting of the stockholders and each director shall be                   
elected to serve for one (1) year and until his successor shall                 
be elected and shall qualify.  Two directors shall have power                   
from time to time, and at any time, when the stockholders as such               
are not assembled in a meeting, regular or special, to increase                 
or decrease their own number by an amendment to these By-Laws,                  
but in accordance with the requirements of the Certificate of                   
Incorporation.  If the number of directors be increased the                     
additional directors may be elected by a majority of the                        
directors in office at the time of the increase to serve until                  
the next annual meeting of the stockholders, or if not so elected               
prior to the next annual meeting of the stockholders, they shall                
be elected by the stockholders.  The number of directors shall                  
never be less than three (3).                                                   
Directors need not be stockholders.                         
Half of the members of the Board of Directors then          
acting, or a majority of these be an odd number, acting at a                    
meeting duly assembled, shall constitute a quorum for the                       
transaction of business, but if at any meeting of the Board of                  
Directors there shall be less than a quorum present, a majority                 
of those present may adjourn the meeting, without further notice,               
from time to time until a quorum shall have been obtained.                      

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In case one or more vacancies shall occur in the Board      
of Directors by reason of death, resignation or otherwise, the                  
remaining directors, although less than a quorum, may, by a                     
majority vote, elect a successor or successors for the unexpired                
term or terms.                                                                  
SECTION 2.  MEETINGS.  Meetings of the Board of             
---------   --------                                        
Directors shall be held at such place within or outside the State               
of Florida as may from time to time be fixed by resolution of the               
Board of Directors, or as may be specified in the notice of the                 
meeting, or as provided for by the Certificate of Incorporation.                
Regular meetings of the Board of Directors shall be held at such                
times as may from time to time be fixed by resolution of the                    
Board of Directors.  Special meetings may be held at any time                   
upon the call of the President or any Vice-President or the                     
Secretary or any two Directors by oral, telegraphic or written                  
notice duly served on or sent or mailed to each director not less               
than two (2) days before such meeting.  A meeting of the Board of               
Directors may be held without notice immediately after the annual               
meeting of stockholders.  Notice need not be given of regular                   
meetings of the Board of Directors.  Meetings may be held at any                
time without notice if all the directors are present, or if at                  
any time before or after the meeting those not present waive                    
notice of the meeting in writing.                                               
The Chairman of the Board shall preside at such             
meeting, but the following officers may preside in his absence in               
the following order only if they are directors.  The President,                 
the Secretary, the Vice-President.                                              
SECTION 3.  COMMITTEES.  The Board of Directors may, in     
---------   ----------                                      
its discretion, by the affirmative vote of a majority of the                    
whole Board of Directors, appoint committees which shall have and               
may exercise such powers as shall be conferred or authorized by                 
the resolutions appointing them.  A majority of any such                        
committee, if the committee be composed of more than two (2)                    
members, may determine its action and fix the time and place of                 
its meetings, unless the Board of Directors shall otherwise                     
provide.  The Board of Directors, shall have power at any time to               
fill vacancies in, to change the membership of, or to discharge                 
any such committee.                                                             
SECTION 4.  EXECUTIVE COMMITTEE.  The Board of              
---------   -------------------                             
Directors may form an Executive Committee, to consist of two (2)                
or more directors elected by resolution passed by a majority of                 
the entire Board, and to which the Board of Directors may direct                
or delegate from time to time all or part of the duties and                     
powers of the Board of Directors with the exception of those                    
duties and powers specifically prohibited by the Laws of the                    
State of Florida, said Committee when so designated and elected                 
shall have the authority to act in the place and stead of the                   
Board of Directors, and may meet at any stated time within or                   
without the State of Florida, on notice to all of the members of                
the Executive Committee by any of their own number.  Should any                 
of the following officers be on the Executive Committee a                       
chairman shall be chosen from among them but in the order stated:               
(1) Chairman of the Board of Directors, (2) President, (3)                      

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Secretary, (4) Vice-President, (5) Treasurer.  During the                       
intervals between meetings of the Board, such Committee shall                   
advise with and aid the officers of the corporation in all                      
matters concerning its interest and management of its business,                 
and generally perform such duties and powers as may be directed                 
or delegated by the Board of Directors from time to time.                       
Membership of the Committee may be increased by, and vacancies                  
therein may be filled by, the Board of Directors.                               
SECTION 5.  DIVIDENDS.  Subject always to the               
---------   ---------                                       
provisions and requirements of the Law, the Certificate of                      
Incorporation and The Amendment to the Certificate of                           
Incorporation, the Board of Directors shall have full power to                  
determine whether any, and if any, what part of any, funds                      
legally available for the payment of dividends shall be declared                
in dividends and paid to stockholders; the division of the whole                
or any part of such funds of the corporation shall rest wholly                  
within the lawful discretion of the Board of Directors, and it                  
shall not be required at any time, against such discretion, to                  
divide or pay any part of such funds among or to the stockholders               
as dividends or otherwise; and the Board of Directors may fix a                 
sum which may be set aside or reserved over and above the capital               
paid in to the corporation as working capital for the corporation               
or as a reserve for any proper purpose, and from time to time may               
increase, diminish, and vary the same in its absolute judgment                  
and direction.                                                                  
The Board of Directors shall, prior to the declaration      
of any dividend, fix a date no more than sixty(60) nor less than                
ten (10) days prior to the payment date on which stockholders of                
record on such fixed date shall be entitled to receive such                     
dividend thereafter payable, notwithstanding such such date may                 
precede determination of any period, provided for by the                        
Certificate of Incorporation, for which a dividend may be                       
payable.                                                                        
SECTION 6.  REMOVAL OF DIRECTORS.  At any special           
---------   --------------------                            
meeting of the directors, duly called as provided in these                      
By-laws, any director or directors may by the affirmative vote of               
a majority of all of the directors be removed from office, either               
with or without cause, and his successor or their successors may                
be elected at such meeting.                                                     
SECTION 7.  INDEMNIFICATION OF DIRECTORS AND OFFICERS.      
---------   -----------------------------------------       
Each director officer, whether or not then in office, shall be                  
indemnified by the corporation against all costs and expenses                   
reasonably incurred by or imposed upon him in connection with or                
arising out of any action, suit, or proceeding in which he may be               
involved by reason of his being or having been a director or                    
officer of the corporation, such expenses to include the cost of                
reasonable settlements (other than amounts paid to the                          
corporation itself) made with a view to curtailment of costs of                 
litigation.                                                                     

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ARTICLE IV.               
-----------               

OFFICERS                
--------                

SECTION 1.  NUMBER.  The Board of Directors shall meet      
---------   ------                                          
as soon after the election thereof held in each year and shall                  
from among them elect a Chairman to be known as the Chairman of                 
the Board of Directors, and to preside at Directors' Meetings and               
at meetings of the Executive Committee, and shall, in addition,                 
elect a President, chosen from the members of the Board, a                      
Secretary, and a Treasurer, and from time time may appoint one or               
more Vice-Presidents and such Assistant Secretaries, Assistant                  
Treasurers and such other officers, agents and employees as it may              
deem proper.  Any two officers may be held by the same person;                  
more than two officers other than the officers of President and                 
Secretary, may be held by the same person.                                      
SECTION 2.  TERM AND REMOVAL.  The term of office of        
---------   ----------------                                
all officers shall be one (1) year and until their respective                   
successors are elected thereafter and qualify, but any officer                  
may be removed from office, either with or without cause, at any                
time by the affirmative vote of a majority of the members of the                
Board of Directors then in office.  A vacancy in any office                     
arising from any cause maybe filled for the unexpired portion of                
the term by the Board of Directors.                                             
SECTION 3.  POWERS AND DUTIES.  The officers of the         
---------   -----------------                               
corporation shall each have such powers and duties as generally                 
pertain to their respective offices, as well as such powers and                 
duties as from time to time may be conferred by the Board of                    
Directors.  The Vice-President and Vice-Presidents, the Assistant               
Secretary or Assistant Secretaries and the Assistant Treasurer or               
Assistant Treasurers shall, in the order of their respective                    
seniorities, in the absence or disability of the President,                     
Secretary or Treasurer respectively, perform the duties of such                 
officer or shall generally assist the President, Secretary or                   
Treasurer, respectively.                                                        
ARTICLE V               
---------               

CERTIFICATION OF STOCK                
----------------------                

SECTION 1.  FORM AND TRANSFERS.  The interest of each       
------------------------------                              
stockholder of the corporation shall be evidenced by certificates               
for shares of stock, certifying the number of shares represented                
thereby and in such form not inconsistent with the Certificate of               
Incorporation as the Board of Directors may from time to time                   
prescribe.                                                                      

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Transfers of shares of the capital stock of the             
corporation shall be made only on the books of the corporation by               
the registered holder thereof, or by his attorney thereunto                     
authorized by power of attorney duly executed and filed with the                
Secretary of the Corporation, or with a tranfer clerk or a                      
Transfer Agent, appointed as in Section 4 of this Article                       
provided, and on surrender of the certificate or certificates for               
such shares properly endorsed and the payment of all taxes                      
thereon.  The person in whose name shares of stock stand on the                 
books of the corporation shall be deemed the owner thereof for                  
all purposes as regards the corporation; provided that whenever                 
any transfer of shares shall be made for collateral security, and               
not absolutely, such fact, if known to the Secretary of the                     
corporation, shall be so expressed in the entry of transfer.                    
The Board may, from time to time, make such additional rules and                
regulations as it may deem expedient, not inconsistent with these               
By-Laws, concerning the issue, transfer, and registration of                    
certificates for shares of the capital stock of the corporation.                
Certificates of stock or Warrants shall be signed by        
the President or a Vice-President and by the Secretary or an                    
Assistant Secretary or the Treasurer or an Assistant Treasurer,                 
and sealed with the seal of the corporation.  Such seal may be a                
facsimile, engraved or printed.  Where any such certificate is                  
signed by a Transfer Agent or a transfer clerk, the signatures of               
the President, Vice-President, Secretary, Assistant Secretary,                  
Treasurer or Assistant Treasurer upon such certificate may be                   
facsimiles, engraved or printed.  In case any such officer who                  
has signed or whose facsimile signature has been placed upon such               
certificate shall have ceased to be such before such certificate                
is issued, it may be issued by the corporation with the same                    
effect as if such officer had not ceased to be such at the time                 
of its issue.                                                                   
SECTION 2.  CLOSING OF TRANSFER BOOKS.  The board of        
---------   -------------------------                       
Directors shall have power to close the stock transfer books of                 
the corporation for a period not exceeding sixty (60) days before               
any stockholders' meeting or to otherwise provide for a cut-off                 
or fixed date, which shall consist of the last date as of which                 
stockholders of record as of such date will be entitled to any                  
dividends; or on which the consent or dissent of stockholders may               
be effectively expressed for any purpose without a meeting; or                  
the date fixed for the payment of any divident or the making of                 
any distribution; or for the delivery of evidences of rights or                 
evidences of interests arising out of any change, conversion,                   
exercise or exchange of capital stock or warrants or option; or                 
as the time as of which stockholders entitled to notice of and to               
vote at any meeting; or whose consent or dissent is required or                 
may be expressed for any purpose; or entitled to receive any such               
divident or distribution; or on which rights or interests shall                 
be determined; and all persons who are holders of record of                     
voting stock at such time and no others shall be entitled to                    
notice of and to vote at such meeting or to express their consent               
or dissent, as the case may be, and only stockholders of record                 
at the time so fixed shall be entitled to receive such divident,                
distributions, rights or interests notwithstanding the fact that                
the period for which any distribution is made or divident is                    
payable expires after the closing of said transfer books or the                 
fixing or setting of said cut-off, fixed or last date.                          

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SECTION #3.  LOST, STOLEN, DESTROYED OR MUTILATED           
----------   ------------------------------------           
CERTIFICATES                      
------------                      
No certificate for shares of stock in the corporation       
shall be issued in place of any certificate alleged to have been                
lost, destroyed or stolen, except on production of such evidence                
of such loss, destruction or theft, and on delivery to the                      
corporation if the Board of Directors shall so require, of a bond               
of indemnity in such amount (not exceeding twice the value of the               
share represented by such certificate), upon such terms and                     
secured by such surety as the Board of Directors may, in its                    
discretion, require.                                                            
SECTION 4.  TRANSFER AGENT.  The Board of Directors may     
---------   --------------                                  
appoint one or more transfer clerks or one or more transfer                     
agents and may require all certificates of stock to bear the                    
signature or signatures real or facsimile of any or all of them.                
SECTION 5.  EXAMINATION OF BOOKS BY STOCKHOLDERS.  The      
---------   ------------------------------------            
Board shall have power to determine, from time to time whether                  
and to what extent and at what times and places and under what                  
conditions and regulations the accounts and books and documents                 
of the corporation, or any of them, shall be open to inspection                 
of the stockholders; and no stockholder shall have any right to                 
inspect any account or book or document of the corporation unless               
specifically authorized to do so by the Board of Directors and as               
required by the Laws of the State of Florida.                                   
ARTICLE VI                
----------                

FISCAL YEAR               
-----------               

The fiscal year of the corporation shall begin on the       
1st day of January in each year, and shall end on the 31st day of               
December next following, unless otherwise determined by the Board               
of Directors.                                                                   
ARTICLE VII               
-----------               

CORPORATE SEAL                
--------------                

The corporate seal of the corporation shall consist of      
two concentric circles, between which shall be the name of the                  
corporation, and in the center shall be inscribed the year of its               
incorporation, and the words, "Corporate Seal, Florida".                        

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ARTICLE VIII                
------------                

AMENDMENTS                
----------                

The By-Laws of the corporation shall be subject to          
alteration, amendment, or repeal, and new By-Laws not                           
inconsistent with any provisions of the Certificate of                          
Incorporation or statute, may be made, either by the affirmative                
vote of the holders of a majority in interest of the stockholders               
of the corporation present in person or by proxy at any annual or               
special meeting of the stockholders and entitled to vote thereat,               
a quorum being present, or by the affirmative vote of a majority                
of the Board, By-Laws made, altered, or amended by the Board may                
be altered, amended or repealed by the stockholders at any annual               
meeting or special meeting thereof.                                             

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘10KSB’ Filing		Date		First		Last			Other Filings
		12/31/99		23		39			10-K,  DEF 14A,  NT 10-K
		6/30/97		18		40			10-Q
Filed on:		4/1/96
		3/28/96		48
		3/27/96		2
		3/25/96		14		22
		2/9/96		26
For Period End:		12/31/95		1		50
		12/31/94		15		46
		12/15/94		4		23
		7/1/94		43
		7/31/92		19
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