FORM 10-Q  SECURITIES AND
	EXCHANGE COMMISSION
	WASHINGTON, DC  20549  [X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
	SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended March 31, 2009 OR [  ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
	SECURITIES EXCHANGE ACT OF 1934
	For the Transition Period From _________ to ________  Commission
	File Number 0-20979  INDUSTRIAL
	SERVICES OF AMERICA, INC.(Exact Name of Registrant as specified in its Charter)  Florida
				59-0712746(State or other jurisdiction of
				(IRS EmployerIncorporation or Organization)
				Identification No.)
  7100 Grade
	Lane, PO Box 32428
	Louisville, Kentucky  40232
	(Address of principal executive offices)  (502) 368-1661
	(Registrant's Telephone Number, Including Area Code)  Check whether the registrant (1) has filed all Reports
	required to be filed by Section 13 or 15(d) of the Securities Exchange Act
	of 1934 during the preceding 12 months (or for such shorter period that the
	registrant was required to file such reports), and (2) has been subject to
	such filing requirements for the past 90 days. Yes X   No ___  Indicate by check mark whether the registrant has
	submitted electronically and posted on its corporate Web site, if any, every
	Interactive Data File required to be submitted and posted pursuant to Rule
	405 of Regulation S-T (Section 232.405 of this chapter) during the preceding
	12 months (or for such shorter period that the registrant was required to
	submit and post such files).  Yes ____  No ____  Indicate by check mark
	whether the registrant is a large accelerated filer, an accelerated filer, a
	non-accelerated filer, or a smaller reporting company.   See the definitions
	of "large accelerated filer," "accelerated filer" and "smaller reporting
	company"  in Rule 12b-2 of the Exchange Act. (Check one):   Large accelerated filer                   Accelerated filer                            Non-accelerated filer                    Smaller
	reporting company X  Indicate by check mark
	whether the registrant is a shell company (as defined in Rule 12b-2 of the
	Exchange Act).  Yes ___  No X  Indicate the number of
	shares outstanding of each of the issuer's classes of common stock, as of
	March 31, 2009:  3,575,292.




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INDUSTRIAL SERVICES OF AMERICA, INC. AND SUBSIDIARIESINDEXPage No.Part I
				Financial InformationCondensed Consolidated Balance SheetsMarch 31, 2009 (Unaudited) and December
				31, 2008
				3Condensed Consolidated Statements ofOperations - Three Months EndedMarch 31, 2009 and 2008 (Unaudited)
				5Condensed Consolidated Statement of
				Shareholders' EquityThree months ended March 31, 2009
				(Unaudited)
				6Condensed Consolidated Statements ofCash Flows - Three Months EndedMarch 31, 2009 and 2008 (Unaudited)
				7Notes to Condensed ConsolidatedFinancial Statements (Unaudited)
				8Management's Discussion and Analysisof Financial Condition and Resultsof Operations
				20Part II
				Other Information
				31




---





PART I -- FINANCIAL INFORMATION  ITEM 1: Condensed CONSOLIDATED FINANCIAL STATEMENTS.  INDUSTRIAL SERVICES OF
	AMERICA, INC. AND SUBSIDIARIES  CONDENSED CONSOLIDATED
	BALANCE SHEETS  ASSETS   March 31,
				2009
				(Unaudited)
				
				December 31,
				2008Current assetsCash and cash
				equivalents
				$     866,389
				
				$   1,103,842Income tax
				receivable
				36,016
				
				36,016Accounts
				receivable - trade (after allowance 
				    for doubtful accounts of $490,000
				    in 2009 and 2008)
				11,940,200
				
				3,811,484Net
				investment in sales-type leases
				56,779
				
				54,629Inventories
				7,130,400
				
				4,371,348Deferred
				income taxes
				912,337
				
				912,337Other
				282,810
				
				126,902Total
				current assets
				21,224,931
				
				10,416,558Shredder system construction in progress
				7,758,395
				
				6,547,902Net
				property and equipment
				12,001,694
				
				10,895,477Total property and equipment
				19,760,089
				
				17,443,379Other AssetsGoodwill
				560,005
				
				560,005Net investment
				in sales-type leases
				56,192
				
				71,222Notes
				receivable -- related party
				158,163
				
				167,594Other assets
				114,994
				
				132,672889,354
				
				931,493$ 41,874,374
				
				$ 28,791,430
    See
	accompanying notes to consolidated financial statements. 3.      INDUSTRIAL SERVICES OF
	AMERICA, INC. AND SUBSIDIARIES  CONDENSED CONSOLIDATED
	BALANCE SHEETS CONTINUED  LIABILITIES AND STOCKHOLDERS' EQUITY   March 31,
				2009
				(Unaudited)
				
				December 31,
				2008Current liabilitiesCurrent
				maturities of long term debt
				$ 10,013,185
				
				$     857,863Current maturities of capital lease obligation
				78,732
				
				80,771Accounts payable
				2,992,515
				
				3,701,895Income tax payable
				376,857
				
				566,025Liability for legal settlements
				-
				
				1,037,165Interest
				rate swap agreement liability (Note 4)
				815,541
				
				792,236Other
				current liabilities
				895,205
				
				391,731Total
				current liabilities
				15,172,035
				
				7,427,686Long-term liabilitiesLong-term debt  (Note 4)
				13,230,891
				
				8,510,014Capital lease obligation
				7,758
				
				20,798Deferred
				income taxes
				482,393
				
				491,71513,721,042
				
				9,022,527Stockholders' equityCommon stock, $.005 par value, 10,000,000 shares authorized,
				    4,295,000 shares issued in 2009 and 2008,
				    3,575,292 shares outstanding in 2009 and 2008
				21,475
				
				21,475Additional paid-in capital
				3,742,373
				
				3,742,373Retained earnings
				11,255,165
				
				10,601,102Accumulated other comprehensive loss
				(489,325)
				
				(475,342)Treasury stock, 719,708 shares at average costin
				2009 and 2008
				(1,548,391)
				
				(1,548,391)12,981,297
				
				12,341,217$ 41,874,374
				
				$ 28,791,430
    See
	accompanying notes to consolidated financial statements. 4.       INDUSTRIAL SERVICES OF
	AMERICA, INC. AND SUBSIDIARIES  CONDENSED CONSOLIDATED
	STATEMENTS OF OPERATIONS THREE MONTHS ENDED MARCH 31,
	2009 AND 2008 (UNAUDITED)   2009
				
				2008Revenue from services
				$  2,645,568
				
				$  4,872,542Revenue from product sales
				21,604,355
				
				21,210,853Total Revenue
				24,249,923
				
				26,083,395Cost of goods sold for services (Note 2)
				2,262,928
				
				3,982,927Cost of goods sold for product sales  (Note 2)
				18,002,190
				
				17,912,548Total Cost of goods sold
				20,265,118
				
				21,895,475Selling, general
				and administrative expenses  (Note2)
				2,709,661
				
				2,303,025Income before
				other income (expense)
				1,275,144
				
				1,884,895Other income
				(expense)Interest expense
				(138,505)
				
				(93,566)Interest income
				15,243
				
				23,434Gain (loss) on sale of assets
				3,750
				
				(5,142)Other income (expense), net
				(65,527)
				
				1,297(185,039)
				
				(73,977)Income before
				income taxes
				1,090,105
				
				1,810,918Income tax
				provision
				436,042
				
				724,367Net income
				$     654,063
				
				$  1,086,551Basic earnings
				per share
				$           0.18
				
				$           0.30Diluted earnings
				per share
				$           0.18
				
				$           0.30Weighted shares
				outstanding:Basic
				3,575,292
				
				3,617,872Diluted
				3,575,292
				
				3,617,872
    See
	accompanying notes to consolidated financial statements. 5.




---





INDUSTRIAL
	SERVICES OF AMERICA, INC.
	AND SUBSIDIARIES
	CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
	THREE MONTHS ENDED MARCH 31, 2009 (UNAUDITED)  ______________________________________________________________________________________________________________________   Common Stock
				
				Additional
				Paid-in
				Capital
				
				Retained
				Earnings
				
				Accumulated
				Other
				Comprehensive
				Loss
				
				Treasury StockShares
				
				Amount
				Shares
				
				Cost
				TotalBalance as of December 31, 2008
				
				4,295,000
				
				$21,475
				
				$3,742,373
				
				$10,601,102
				
				$   (475,342)
				
				(719,708)
				
				$(1,548,391)
				
				$12,341,217Net unrealized loss on derivative instruments, net of tax
				
				-
				
				-
				
				-
				
				-
				
				(13,983)
				
				-
				
				-
				
				(13,983)Net income
				
				-
				
				-
				
				-
				
				654,063
				
				-
				
				-
				
				-
				
				654,063Balance as of March 31, 2009
				
				4,295,000
				
				$21,475
				
				$3,742,373
				
				$11,255,165
				
				$  (489,325)
				
				(719,708)
				
				$ (1,548,391)
				
				$12,981,297
    See
	accompanying notes to consolidated financial statements. 6.




---







INDUSTRIAL SERVICES OF
	AMERICA, INC. AND SUBSIDIARIES  CONDENSED CONSOLIDATED
	STATEMENTS OF CASH FLOWS THREE MONTHS ENDED MARCH 31,
	2009 AND 2007 (UNAUDITED)  2009
				
				2008Cash flows from operating activitiesNet income
				$  654,063
				
				$ 1,086,551Adjustments to
				reconcile net income to
				    net cash from operating activities:Depreciation and amortization
				613,626
				
				519,336(Gain)
				loss on sale of property and equipment
				(3,750)
				
				5,142Deferred
				income taxes
				(23,305)
				
				-Change in
				assets and liabilitiesReceivables
				(8,128,716)
				
				(2,447,574)Net
				investment in sales-type leases
				12,880
				
				15,266Inventories
				6,087,742
				
				790,951Other
				assets
				(138,230)
				
				(300,228)Accounts
				payable
				(709,380)
				
				37,681Other
				current liabilities
				(699,554)
				
				658,471Net
				cash from operating activities
				(2,334,624)
				
				365,596Cash flows from investing activitiesProceeds
				from sale of property and equipment
				3,750
				
				16,639Purchases
				of property and equipment
				(1,719,843)
				
				(367,555)Payments
				for shredder system
				(1,210,493)
				
				(1,065,510)Acquisition of Venture Metals
				(8,846,794)
				
				-Payments
				from related party
				9,431
				
				8,928Net
				cash from investing activities
				(11,763,949)
				
				(1,407,498)Cash flows from financing activitiesPurchases of common stock
				-
				
				(163,600)Payments on capital lease obligation
				(15,079)
				
				(51,615)Proceeds from long-term debt
				14,033,750
				
				1,000,000Payments on long-term debt
				(157,551)
				
				(82,550)Net cash from financing activities
				13,861,120
				
				702,235Net decrease
				in cash
				(237,453)
				
				(339,667)Cash at
				beginning of period
				1,103,842
				
				1,501,685Cash at end
				of period
				$    866,389
				
				$ 1,162,018Supplemental disclosure of cash flow informationCash paid for interest
				$    138,505
				
				$      93,566Cash paid for taxes
				625,210
				
				-
  7     INDUSTRIAL SERVICES OF
	AMERICA, INC. AND SUBSIDIARIES  NOTES TO CONDENSED
	CONSOLIDATED FINANCIAL STATEMENTS  (Unaudited)  NOTE 1 -- BASIS OF PRESENTATION  The
	accompanying unaudited condensed consolidated financial statements have been
	prepared in accordance with U. S. generally accepted accounting principles
	for interim financial information and with the instructions to Form 10-Q and
	Article 10 of Regulation S-X.  Accordingly, they do not include all of the
	information and footnotes required by U. S. generally accepted accounting
	principles for complete consolidated financial statements.  The information
	furnished includes all adjustments, which are, in the opinion of management,
	necessary to present fairly our financial position as of March 31, 2009 and
	the results of our operations and changes in our cash flow for the periods
	ended March 31, 2009 and 2008.  Results of operations for the period ended
	March 31, 2009 are not necessarily indicative of the results that may be
	expected for the entire year.  Additional information, including the audited
	December 31, 2008 consolidated financial statements and the Summary of
	Significant Accounting Policies, is included in our Annual Report on Form
	10-K for the year ended December 31, 2008 on file with the Securities and
	Exchange Commission.  We carry certain of our
	financial assets and liabilities at fair value on a recurring basis. These
	financial assets and liabilities are composed of trading account assets,
	investment securities available for sale and various types of derivative
	instruments. In addition, we measure certain assets, such as goodwill and
	other long-lived assets, at fair value on a non-recurring basis to evaluate
	those assets for potential impairment. Fair value is defined as the price
	that would be received to sell an asset or paid to transfer a liability in
	an orderly transaction between market participants at the measurement date.  In accordance with SFAS No. 157, Fair Value Measurements,
	which we adopted effective January 1, 2008, we categorize our financial
	assets and liabilities into the following fair value hierarchy:  Level 1 - Financial assets and liabilities with values based
	on unadjusted quoted prices for identical assets or liabilities in an active
	market. Examples of level 1 financial instruments include active
	exchange-traded equity securities and certain U.S. government securities.  Level 2 - Financial assets and liabilities with values based
	on quoted prices for similar assets and liabilities in active markets, and
	inputs that are observable for the asset or liability, either directly or
	indirectly, for substantially the full term of the asset or liability.
	Examples of level 2 financial instruments include commercial paper purchased
	from the State Street-administered asset-backed commercial paper conduits,
	various types of interest-rate and foreign exchange derivative instruments,
	and various types of fixed-income investment securities. Pricing models are
	utilized to estimate fair value for certain financial assets and liabilities
	categorized in level 2.  8     Level 3 - Financial assets and liabilities with values based
	on prices or valuation techniques that require inputs that are both
	unobservable in the market and significant to the overall fair value
	measurement. These inputs reflect management's judgment about the
	assumptions that a market participant would use in pricing the asset or
	liability, and are based on the best available information, some of which is
	internally developed. Examples of level 3 financial instruments include
	certain corporate debt, asset- and mortgage-backed securities and certain
	derivative instruments with little or no market activity and a resulting
	lack of price transparency.  When determining the fair value measurements for financial
	assets and liabilities carried at fair value on a recurring basis, we
	consider the principal or most advantageous market in which we would
	transact and consider assumptions that market participants would use when
	pricing the asset or liability. When possible, we look to active and
	observable markets to price identical assets or liabilities. When identical
	assets and liabilities are not traded in active markets, we look to market
	observable data for similar assets and liabilities. Nevertheless, certain
	assets and liabilities are not actively traded in observable markets, and we
	use alternative valuation techniques to derive fair value measurements.  We use the fair value methodology outlined in SFAS 157 to
	value the assets and liabilities for cash and debt. All of our cash and debt
	are defined as Level 1.  In accordance with SFAS 157, the following table
	represents our fair value hierarchy for financial instruments at March 31,
	2009:  Level 1
				Level 2
				TotalAssetsCash and cash equivalents
				$ 866,389
				-
				$       866,389LiabilitiesLong term debt
				-
				$
				(23,244,076)
				$
				(23,244,076)Derivative contract
				-
				(815,541)
				(815,541)
  NOTE 2 -- INCOME STATEMENT
	RECLASSIFICATIONS  We have reclassified certain items
	in the accompanying Financial Statements and Notes to the Financial
	Statements for the prior period in order to be comparable with the current
	classifications, including changes to segmental reporting.  These reclassifications had no effect on previously reported net income.  NOTE 3 -- ESTIMATES  In preparing
	the condensed consolidated financial statements in accordance with U. S.
	generally accepted accounting principles for interim financial information
	and with the instructions to Form 10-Q and Article 10 of Regulation S-X,
	management must make estimates and assumptions.  These estimates and
	assumptions affect the amounts reported for assets, liabilities, revenues
	and expenses, as well as affecting the disclosures provided.  Future results
	could differ from the current estimates.  9     NOTE 4 -- LONG TERM DEBT
	AND NOTES PAYABLE TO BANK  On
	February 11, 2009, we executed a promissory note, loan agreement and related
	security documents with BB&T in the amount of $12,000,000 for the purpose of
	financing our acquisition of inventory and fixed assets from Venture Metals,
	and real estate at 3409 Camp Ground Road, Louisville, Kentucky, from Luca
	Investments, LLC,  an affiliate of Venture Metals.  The maturity date of
	this note is February 11, 2010.  Interest is payable monthly commencing
	March 11, 2009, and the note bears interest at the adjusted LIBOR rate of
	one month LIBOR plus 2.25% per annum with a floor of 4%.  As of March 31,
	2009, the applicable interest rate was 4%.  All ISA's assets (except rental
	fleet equipment) secure this note.  As a result of this note and related
	loan documents, ISA and BB&T undertook amendments to existing security
	agreements related to the $10,000,000 borrowing line from BB&T, dated
	December 22, 2006 (see below), a BB&T Bankcard Corporation Commercial Card
	Application and BB&T Bankcard Corporation Commercial Card Plan Agreement,
	executed December 9, 2003 and December 8, 2003, and a $6,000,000 equipment
	loan to purchase the ISA shredder system and complementary facility
	improvements, dated May 7, 2008, so as to provide that the security for each
	of the above loans also secures the $12,000,000 loan of February 11, 2009.  This
	$12,000,000 loan provides for advances of up to 80% of ISA's eligible
	accounts receivable, 80% of eligible real estate, 35% of eligible raw
	materials inventory, and up to 100% of ISA's net book value of eligible
	equipment less any outstanding indebtedness on the equipment.  This
	$12,000,000 loan contains restrictive, affirmative, negative and financial
	covenants.  Events of default include failure to promptly pay principal or
	interest on the note, proof of a false or misleading representation or
	warranty in any loan document, default on the performance by ISA of any
	other obligation or indebtedness when due or in connection with money
	borrowed, breach of any covenant, condition or agreement made under any of
	the loan documents, bankruptcy of ISA, final judgment for payment of money
	remaining undischarged for 30 days after judgment against ISA which is not
	otherwise covered by insurance, BB&T in good faith deeming itself unsafe or
	insecure, or the failure of any lien or security interest granted to BB&T by
	ISA to have the priority agreed to by BB&T on the date granted or otherwise
	becomes unperfected or invalid for any reason.  Remedies include the
	declaration by BB&T of the balances of the ISA notes to be immediately due
	and payable, the pledge of additional collateral, the taking of the
	collateral as security for the note, or the exercise of any other remedies
	under the Kentucky Uniform Commercial Code.  We
	entered into this $12,000,000 loan partially to reimburse ourselves for the
	acquisition of the inventory from Venture Metals and to purchase real estate
	from Luca Investments, LLC, the lessor and affiliate of Venture Metals.  We
	maintain a $10.0 million senior revolving credit facility with the BB&T. 
	This revolving credit facility has a three year term expiring January 1,
	2012, providing for advances of up to eighty percent (80%) of our eligible
	accounts receivable and up to thirty five percent (35%) of eligible
	inventory, and up to one hundred percent (100%) of our net book value of
	eligible equipment less an outstanding indebtedness on the equipment.  The
	revolving credit facility bears interest at the one month LIBOR rate, as
	published in the Wall Street Journal, plus two and twenty-five
	one-hundredths percent (2.25%) per annum, and is secured by all our assets
	(except rental fleet equipment).  As of March 31, 2009, the outstanding
	balance on this credit facility was $2,500,000.  10     On May
	14, 2008, we executed a loan agreement with BB&T in the amount of $3.0
	million secured by our rental fleet equipment.  This note replaces the $2.0
	million rental fleet loan with Fifth Third Bank.  Until October 15, 2008,
	indebtedness under this loan agreement accrued interest at the one month
	Libor rate, as published in the Wall Street Journal, plus 1.625% per annum. 
	Fifty-nine (59) monthly principal and interest payments of $30,966.76
	commenced on June 7, 2008 with one final payment of all remaining principal
	and accrued interest due on May 7, 2013.  Effective October 15, 2008, we
	converted this revolving credit facility with a variable interest rate into
	a fixed interest rate of 5.65% by executing a floating to fixed interest
	rate swap with BB&T as the counterparty to the ISDA Master Agreement,
	Schedule and confirmation.  The maturity date under this revised agreement
	is May 2013.  The repayment terms are principal paid in twelve (12) monthly
	payments of $19,673.54 plus interest commencing on November 7, 2008 and
	continuing through October 7, 2009, principal paid in 12 monthly payments of
	$20,835.07 plus interest commencing on November 7, 2009 and continuing
	through October 7, 2010, principal paid in 12 monthly payments of $22,065.17
	plus interest commencing on November 7, 2010 and continuing through October
	7, 2011, principal paid in 12 monthly payments of $23,367.89 plus interest
	commencing on November 7, 2011 and continuing through October 7, 2012,
	principal paid in six (6) monthly payments of $24,747.53 plus interest
	commencing on November 7, 2012 and continuing through April 7, 2013, with
	one final payment of all remaining principal and accrued interest due at
	maturity on May 7, 2013.  The principal and interest payments of this
	facility are calculated on the basis of a ten (10) year amortization,
	resulting in a principal balance of approximately $1.7 million due at
	maturity.  The terms of the loan agreement place certain restrictive
	covenants on us, including maintenance of a specified tangible net worth,
	debt to net worth and EBITDA ratio.  Consequently, these covenants restrict
	our ability to incur as much additional debt as we may desire for future
	growth.  At March 31, 2009, we were in compliance with all restrictive
	covenants.  On May
	14, 2008, we executed a loan agreement with BB&T in the amount of $6.0
	million to finance the purchase of our shredder system and complementary
	facility improvements.  The security for this facility is the shredder and
	assets being purchased.  Our Board approved the acquisition and installation
	of the shredder system and complementary facility improvements on June 21,
	2007.  The note has a term beginning May 2008 and originally expiring
	November 2013.  Until October 15, 2008, the facility bore interest at the
	one month Libor rate, as published in the Wall Street Journal, plus 1.625%
	per annum.  The facility originally provided for interest only monthly
	payments which commenced June 7, 2008 and continued through November 7,
	2008.  Effective October 15, 2008, we converted this revolving credit
	facility into a fixed interest rate of 5.89% by executing a floating to
	fixed interest rate swap with BB&T as the counterparty to the ISDA Master
	Agreement, Schedule and confirmation.  The maturity date under this revised
	agreement is April 2014.  The repayment terms are interest only paid in 6
	monthly payments starting on November 7, 2008 and continuing through April
	7, 2009, principal paid in twelve (12) monthly payments of $37,636.11 plus
	interest commencing on May 7, 2009 and continuing through April 7, 2010,
	principal paid in 12 monthly payments of $39,957.42 plus interest commencing
	on May 7, 2010 and continuing through April 7, 2011, principal paid in 12
	monthly payments of $42,421.91 plus interest commencing on May 7, 2011 and
	continuing through April 7, 2012, principal paid in 12 monthly payments of
	$45,038.40 plus interest commencing on May 7, 2012 and continuing through
	April 7, 2013, principal paid in eleven (11) monthly payments of $47,816.27
	plus interest commencing on May 7, 2013 and continuing through March 7,
	2014, with one final payment of all remaining principal and accrued interest
	due at maturity on April 7, 2014.  The principal and interest payments of
	the facility are calculated on the basis of a ten (10) year amortization,
	resulting in a principal balance of approximately $3.5 million being due on
	or before April 7, 2014, at which time we anticipate that we will
	refinance.  The terms of the loan agreement place certain restrictive
	covenants on us, including maintenance of a specified tangible net worth,
	debt to net worth and EBITDA ratio.  Consequently, these covenants restrict
	our ability to incur as much additional debt as we may desire for future
	growth.  At March 31, 2009, we were in compliance with all restrictive
	covenants.  11     We entered into three interest rate
	swap agreements swapping variable rates for fixed rates. The first swap
	agreement covers $6 million in debt and commenced October 15, 2008 and
	matures on April 7, 2014. The second swap agreement covers approximately
	$2.9 million in debt and commenced October 15, 2008 and matures on May 7,
	2013.  The third swap agreement covers $606,027 in debt and commenced
	October 22, 2008 and matures on October 22, 2013.  The three swap agreements
	fix our interest rate at approximately 5.8%.  At March 31, 2009, we recorded
	the estimated fair value of the three swaps at approximately $816,000. 
	Accounting rules require us to recognize all derivatives on the balance
	sheet at estimated fair value.   We have designated this agreement as a cash
	flow hedge.  Long-term debt as of March 31, 2009 and December 31, 2008 consists of the
	following:  2009
				
				2008(unaudited)Non-revolving line of credit with
				BB&T effective February 11, 2009 in the amount of $12,000,000
				for the purpose of financing our acquisition of inventory and
				fixed assets from Venture Metals, LLC, and real estate from Luca
				Investments, LLC, an affiliate of Venture Metals.  The maturity
				date of this note is February 11, 2010.  Interest is payable
				monthly commencing March 11, 2009, and the note shall bear
				interest at the adjusted LIBOR rate of one month LIBOR plus
				2.25% per annum with a floor of 4%.  As of February 11, 2009,
				the applicable interest rate was 4% since the calculated rate
				was 2.67%.  All our assets (except rental fleet equipment)
				secure this note.
				
				$  9,034,865
				
				-Note payable to Venture Metals,
				LLC effective February 11, 2009 in the amount of $1,468,885 for
				the purchase of all of the fixed assets of Venture Metals.  The
				maturity date is February 28, 2011 and payments are $15,000 per
				month.  There is no interest rate stated in the agreement.
				
				1,468,885
				
				-Revolving credit facility with
				BB&T secured by all assets except for rental fleet equipment
				with a variable interest rate of Libor plus 2.25% and no
				required monthly principal payments.  The maturity date under
				this agreement is January 1, 2012.
				
				2,500,000
				
				-Note payable to Branch Banking
				and Trust Company in the amount of $3.0 million secured by our
				rental fleet equipment with a fixed interest rate of 5.65%.  The
				repayment terms are principal and interest paid monthly
				commencing on November 7, 2008 with one final payment of all
				remaining principal and accrued interest due at maturity on May
				7, 2013.  The maturity date under this agreement is May 2013.
				
				2,779,073
				
				2,838,094Note payable to Branch Banking
				and Trust Company in the amount of $6.0 million secured by our
				shredder system assets with a fixed interest rate of 5.89%. The
				repayment terms are principal and interest paid monthly
				commencing on November 7, 2008 with one final payment of all
				remaining principal and accrued interest due at maturity on
				April 7, 2014.   The maturity date under this agreement is April
				2014.
				
				6,000,000
				
				5,000,000Note payable to Branch Banking
				and Trust Company in the amount of $609,900 secured by a crane
				with a fixed interest rate of 5.89%.  The repayment terms are
				principal and interest paid monthly beginning December 1, 2008
				with one final payment of all remaining principal and accrued
				interest due at maturity in December 2013.
				
				590,533
				
				602,153  12     Note payable to Paccar Financial
				Corp. in the amount of $163,655 secured by two Kenworth trucks. 
				Payments are $3,395.36 per month with an effective interest rate
				of 6.5%. The maturity date under this agreement is September
				2011.
				
				143,283
				
				153,469Note payable to Industrial Logistic Services,
				LLC, for various assets including
				tractor trailers, trucks and containers. The repayment terms are
				$20,000 per month for 60 months at a seven percent (7%) interest
				rate.  The maturity date under this agreement is August 2012.
				
				727,437
				
				774,16123,244,076
				
				9,367,877Less current maturities
				
				10,013,185
				
				857,863$  13,230,891
				
				$  8,510,014
  The annual maturities of long-term debt as of
	March 31, 2009 are as follows:  2009
				
				$   10,013,1852010
				
				5,068,1312011
				
				1,059,5922012
				
				983,994Thereafter
				
				6,119,174Total
				
				$ 23,244,076
  NOTE 5 -- SEGMENT INFORMATION  Our operations include three primary segments:  ISA
	Recycling, ISA Alloys, and a combined segment Computerized Waste Systems (CWS)
	and Waste Equipment Sales & Service (WESSCO).  Previously, our three primary
	reporting segments were ISA Recycling, CWS and WESSCO.  However, CWS
	revenues have declined so that this segment is no longer material to our
	total revenues and we have combined this segment with WESSCO.  ISA Alloys,
	the assets of which we acquired in the first quarter of 2009, reports
	revenues which are 62% of our total revenues, so we have determined that the
	ISA Alloys segment should be reported separately.  With our acquisition of Venture Metals' inventory, ISA
	Alloys enters into the stainless steel and high-temperature alloys recycling
	business.  ISA Recycling provides products and services to meet the needs of
	its customers related to ferrous, non-ferrous and fiber recycling at two
	locations in the Midwest.  CWS provides waste disposal services including
	contract negotiations with service providers, centralized billing, invoice
	auditing, and centralized dispatching.  WESSCO sells, leases, and services
	waste handling and recycling equipment.  Our three reportable segments are determined by the products
	and services that each offers.  The recycling segment generates its revenues
	based on buying and selling of ferrous, non-ferrous and fiber scrap; ISA
	Alloys generates its revenues based on buying and selling of stainless steel
	and high-temperature alloys; CWS's revenues consist of charges to customers
	for waste disposal services and WESSCO sales and lease income comprise the
	primary source of revenue for this segment.  The components of the column
	labeled "other" are selling, general and administrative expenses that are
	not directly related to the three primary segments.  13     We evaluate segment performance based on gross profit or
	loss and the evaluation process for each segment includes only direct
	expenses and selling, general and administrative costs, omitting any other
	income and expense and income taxes.  FOR THE 
				THREE MONTHS ENDED
				MARCH 31, 2009
				ISARECYCLING
				
				ISA ALLOYS
				
				CWS & WESSCO
				
				OTHER
				
				SEGMENTTOTALSRecycling revenues
				$ 5,953,805
				
				$                 -
				
				$               -
				
				$             -
				
				$  5,953,805Stainless revenues
				
				
				15,097,830
				
				
				
				
				
				15,097,830Equipment sales, serviceand leasing revenues
				
				
				-
				
				552,720
				
				-
				
				552,720Management fees
				-
				
				-
				
				2,645,568
				
				-
				
				2,645,568Cost of goods sold
				(5,790,179)
				
				(12,013,751)
				
				(2,461,188)
				
				-
				
				(20,265,118)Selling, general andadministrative expenses
				(1,105,449)
				
				(621,064)
				
				(376,524)
				
				(606,624)
				
				(2,709,661)Segment profit (loss)
				$   (941,823)
				
				$   2,463,015
				
				$    360,576
				
				$  (606,624)
				
				$   1,275,144Segment assets
				$22,030,011
				
				$ 13,102,487
				
				$ 2,831,806
				
				$ 3,910,070
				
				$41,874,374
   FOR THE
				THREE MONTHS ENDED
				MARCH 31, 2008
				ISARECYCLING
				
				COMPUTERIZED
				WASTESYSTEMS
				
				WASTE 
				EQUIPMENT
				SALES &
				SERVICES
				
				OTHER
				
				SEGMENTTOTALSRecycling revenues
				$ 20,673,717
				
				$                  -
				
				$               -
				
				$               -
				
				$ 20,673,717Equipment sales, serviceAnd leasing revenues
				-
				
				-
				
				537,136
				
				-
				
				537,136Management fees
				-
				
				4,872,542
				
				-
				
				-
				
				4,872,542Cost of goods sold
				(17,710,873)
				
				(3,982,927)
				
				(201,675)
				
				-
				
				(21,895,475)Selling, general andadministrative expenses
				(1,276,521)
				
				(296,235)
				
				(113,037)
				
				(617,232)
				
				(2,303,025)Segment profit (loss)
				$   1,686,323
				
				$       593,380
				
				$    222,424
				
				$  (617,232)
				
				$ 1,884,895Segment assets
				$ 21,969,931
				
				$   1,531,641
				
				$ 2,058,675
				
				$ 3,209,213
				
				$28,769,460
  NOTE 6 -- INVENTORIES  Our inventories primarily
	consist of ferrous and non-ferrous scrap metals and stainless steel and
	high-temperature alloys metals and are valued at the lower of average
	purchased cost or market. Quantities of inventories are determined based on
	our inventory systems and are subject to periodic physical verification
	using estimation techniques including observation, weighing and other
	industry methods. We recognize inventory write-down when the market value,
	based upon current market pricing, falls below recorded value or when the
	estimated volume is less than the recorded volume of the inventory.  We
	would record the loss in cost of goods sold in the period during which we
	identified the loss.  14     We make certain
	assumptions regarding future demand and net realizable value in order to
	assess that inventory is properly recorded at the lower of cost or market.
	We base our assumptions on historical experience, current market conditions
	and current replacement costs.  If the anticipated future selling prices of
	scrap metal and finished steel products should decline, we would re-assess
	the recorded net realizable value of our inventory and make any adjustments
	we feel necessary in order to reduce the value of our inventory (and
	increase cost of goods sold) to the lower of cost or market.  We believe that the
	long-term fundamentals supporting the prices for recycled metals remain
	positive; however, given the current trends in the market for ferrous and
	nonferrous metal, we believe that fiscal 2009 selling prices will be lower
	than those seen in 2008.  Due to the high level of uncertainty regarding the
	economic environment, our past trends of sales volumes may not be indicative
	of expected volumes in fiscal 2009.  Some commodities are in
	saleable condition at acquisition.  We purchase these commodities in small
	amounts until we have a truckload of material available for shipment.  Some
	commodities are not in saleable condition at acquisition.  These commodities
	must be torched, sheared or baled.  We do not have work-in-process inventory
	that needs to be manufactured to become finished goods.  We include
	processing costs in inventory for all commodities.   Ferrous inventory of
	$2,174,749 at March 31, 2009 was comprised of $1,012,389 in raw materials
	and $1,162,360 of finished goods.  Non-ferrous inventory of $1,533,949 at
	March 31, 2009 was comprised of $352,629 in raw materials and $1,181,320 of
	finished goods.  Ferrous inventory of $2,162,149 at December 31, 2008 was
	comprised of $418,035 in raw materials and $1,744,114 of finished goods. 
	Non-ferrous inventory of $2,033,154 at December 31, 2008 was comprised of
	$362,065 in raw materials and $1,671,089 of finished goods.  We charged
	$893,720 in general and administrative processing costs to cost of sales for
	the quarter ended March 31, 2009 and $3,098,870 for the year ended December
	31, 2008.  On January 13, 2009 we
	entered into an inventory purchase agreement with Venture Metals, LLC and
	its members, Steve Jones, Jeff Valentine and Carlos Corona.  Under the
	agreement, we paid Venture Metals $8,846,794 for inventory comprised of
	stainless steel and high temperature alloys, which we verified as to
	weight.  We determined the purchase price for the inventory based on market
	pricing, primarily through a web site known as metalprices.com.  We funded
	our purchase of the stainless steel inventory through our existing line of
	credit with BB&T.  The balance of the stainless steel inventory was
	$3,247,990 as of March 31, 2009.  Revenues from this new
	stainless steel and alloys segment are expected to approximate the size of
	revenues from our existing ferrous and nonferrous recycling division.  We
	already have contracts to market a substantial amount of the purchased
	stainless steel scrap inventory and we sold and shipped more than 90 percent
	of the stainless steel and high-temperature alloys inventories during the
	first quarter of 2009.  Our strategic expansion into the market for
	stainless steel and high-temperature alloys has enabled us to deliver a
	profitable quarter in what continues to be a very challenging market for
	recyclable commodities.  This acquisition positions us for strategic growth.  15     Inventory also includes all types of
	industrial waste handling equipment and machinery held for resale such as
	compactors, balers, and containers.  Other inventory includes cardboard and
	baling wire.  Inventories as of March 31, 2009 and December 31, 2008 consist
	of the following:  March 31, 2009(unaudited)
				
				December 31,2008Stainless steel alloys
				$ 3,247,990
				
				$                -Ferrous materials
				2,174,749
				
				2,162,149Non-ferrous materials
				1,533,949
				
				2,033,154Waste equipment machinery
				100,487
				
				95,675Other
				73,225
				
				80,370Total inventories
				$ 7,130,400
				
				$ 4,371,348
   NOTE 7 -- LEASES  Operating Leases:  We lease our Louisville, Kentucky facility
	from a related party under an operating lease expiring December 2012.  The
	rent was adjusted in January 2008 per the agreement to monthly payments of
	$48,500 through December 2012.  In addition, we are also responsible for
	real estate taxes, insurance, utilities and maintenance expense.  We lease a facility in Dallas, Texas for
	management services operations.  The agreement provided that monthly
	payments of $2,457 were paid through September 2006.  The lease was renewed
	effective October 1, 2007 for a period of two years with monthly payments of
	$2,750.   We also lease other machinery and equipment under operating leases
	which expire through August 2012.  We lease a facility in Lexington,
	Kentucky for $4,500 per month; the lease terminates December 31, 2012.  We
	have subleased this property for a term commencing March 1, 2007 and ending
	December 31, 2012 for $4,500 per month.   If for any reason the sublessee
	defaults, we remain liable for the remainder of the lease payments through
	December 31, 2012.  Future minimum lease payments for operating
	leases as of March 31, 2009 are as follows:  2009
				
				$    668,9782010
				
				637,8392011
				
				636,0002012
				
				477,000Future minimum lease payments
				
				$ 2,419,817
  Total rent expense for the three months ended
	March 31, 2009 and 2008 was $307,220 and $208,176, respectively.  16     Capital Leases:  We lease various pieces of
	equipment which qualify as capital leases.  These lease arrangements require
	monthly lease payments expiring at various dates through June 2010.  The following is a summary of
	assets held under capital leases which are included in property and
	equipment:  2009
				
				2008Equipment
				
				$   366,172
				
				$   771,567Less accumulated depreciation
				
				83,273
				
				201,141282,899
				
				$   570,426
  The following is a schedule of future annual
	minimum lease payments under the capitalized lease arrangements, together
	with the present value of net minimum lease payments at March 31, 2009.  2009
				
				$   78,7322010
				
				7,758Total future minimum lease
				payments
				
				86,490Less amount representing
				interest
				
				-Present value of net minimumlease payments
				
				86,490Less current portion
				
				(78,732)Capital Lease Obligations
				
				$    7,758
  17     NOTE 8 -- PER SHARE DATA  The computation for basic and diluted earnings per share is as follows:   2009
				
				2008Basic earnings per shareNet income
				$    654,063
				
				$  1,086,551Weighted average shares
				outstanding
				3,575,292
				
				3,617,872Basic earnings per share
				$            .18
				
				$             .30Diluted earnings per shareNet income
				$    654,063
				
				$  1,086,551Weighted average shares
				outstanding
				3,575,292
				
				3,617,872Add dilutive effect of assumed
				exercising of stock options
				-
				
				-Diluted weighted average sharesoutstanding
				3,575,292
				
				3,617,872Diluted earnings per share
				$            .18
				
				$             .30
   NOTE 9 -- PURCHASE OF INVENTORY AND
	FIXED ASSETS OF VENTURE METALS  On January 13, 2009 we entered into
	an inventory purchase agreement with Venture Metals, LLC and its members,
	Steve Jones, Jeff Valentine and Carlos Corona, under which we agreed to pay
	to Venture Metals $8,846,794 for inventory comprised of stainless steel and
	high temperature alloys, which we verified as to weight. We funded the
	purchase of the inventory through our line of credit with Branch Banking &
	Trust Company.  Under the agreement, we also have
	the right to retain the use of the property located at 3409 Camp Ground
	Road, Louisville, Kentucky, the site of the Venture Metals business that
	Venture Metals leases from Luca Investments, LLC, an affiliate of Venture
	Metals, owned 50% each by Messrs. Jones and Valentine.  We have the right to
	use the facilities located on those premises for a period not to exceed two
	years from the date of the agreement for a monthly rental of $15,000.  
	Messrs. Jones, Valentine and Corona are our employees.  18     NOTE 10 -- SUBSEQUENT EVENTS  On April 13, 2009, we exercised our
	option to purchase fixed assets under an installment purchase agreement with
	Venture Metals, LLC, whereby Venture Metals sold all of its fixed assets,
	located at 3409 Camp Ground Road, Louisville, Kentucky, to us by virtue of
	an installment purchase agreement effective February 11, 2009.  Steve Jones,
	Jeff Valentine and Carlos Corona are the sole members of Venture Metals and
	are currently our employees.  Under the notice of exercise of option to
	purchase fixed assets we agreed to purchase the fixed assets on April 17,
	2009 for the purchase price of $1,498,885 less the aggregate amount of all
	rent we paid to Venture Metals under the previous agreement.  The
	installment payment we owed to Venture Metals was $15,000 per month
	commencing March 1, 2009 with a pro-rata amount paid for the period from
	February 11, 2009 through February 28, 2009.  A further description of the
	installment purchase agreement and related transactions is contained in
	Items 1.01 and 2.01 of Form 8-K for the event dated February 11, 2009, as
	filed on February 18, 2009, with the Securities and Exchange Commission by
	us.  At the time of the consummation of
	the option to purchase fixed assets, the installment purchase agreement
	terminated.  In connection with the exercise of the option to purchase,
	Venture Metals had to satisfy outstanding obligations with respect to the
	fixed assets owed to a number of creditors.  The fixed assets include
	equipment such as cranes, loaders, scales, forklifts, computers, including
	computer software, furniture and certain leasehold improvements to the
	property at 3409 Camp Ground Road, Louisville, Kentucky.  We completed the acquisition of the
	real property at 3409 Camp Ground Road, Louisville, Kentucky, from Luca
	Investments, LLC, an affiliate of Venture Metals, on April 2, 2009.  Under
	the agreement, we purchased the property and improvements thereon consisting
	of 5.67 acres with a 7,875 square foot building located thereon.  We paid
	$2,067,041 for the property, comprised of $1,267,041 in cash and 200,000
	shares of ISA common stock priced at the per share NASDAQ last sale price of
	$4.00, as quoted on NASDAQ at 10:30 a.m. (EDT) on April 2, 2009.  We
	determined the purchase price for the real estate based on internal analyses
	as to the value of the property.  BB&T provided credit to us under our
	$10,000,000 line of credit with BB&T to fund the cash portion of the
	purchase price.  19      ITEM 2:  MANAGEMENT'S
	DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.  The following discussion
	and analysis should be read in conjunction with our consolidated financial
	statements and the accompanying notes thereto included elsewhere in this
	report.  The following discussion
	and analysis contains certain financial predictions, forecasts and
	projections which constitute "forward-looking statements" within the meaning
	of the federal securities laws.  Actual results could differ materially from
	those financial predictions, forecasts and projections and there can be no
	assurance that we will achieve such financial predictions, forecasts and
	projections.  Factors that could affect financial predictions, forecasts and
	projections include the fluctuations in the commodity price index and any
	conditions internal to our major customers, including loss of their accounts
	and other factors as listed in our Form 10-K for the year ended December 31,
	2008, as filed with the Securities and Exchange Commission.  General  We are primarily focusing
	our attention now and in the future towards our recycling business and
	stainless steel alloys segments.  We sell processed ferrous and non-ferrous
	scrap material to end-users such as steel mini-mills, integrated steel
	makers, foundries and refineries.  We purchase ferrous and non-ferrous scrap
	material primarily from industrial and commercial generators of steel, iron,
	aluminum, copper, stainless steel and other metals as well as from other
	scrap dealers who deliver these materials directly to our facilities. We
	process these materials by sorting, shearing, cutting and/or baling. We will
	also continue to focus on initiating growth in our management services
	business segment and our waste and recycling equipment sales, service and
	leasing division.  In January 2009, we expanded
	into the stainless steel recycling market for super alloys and high
	temperature metals by purchasing inventories from Venture Metals, LLC and
	hiring two of its key executives.  The Venture Metals asset purchase is the
	latest in a series of actions we have undertaken to position ourselves for
	strategic growth. The multi-million-dollar shredder project, when completed,
	will expand our processing capacity, offer specialty grades of scrap and
	improve end-product quality.  We continue to pursue a
	growth strategy in the waste management services arena by adding new
	locations of existing customers as well as marketing our services to
	potential customers.  Currently, we service approximately 2,100 customer
	locations throughout the United States and we utilize an active database of
	over 6,500 vendors to provide timely, thorough and cost-effective service to
	our customers.  Our goal is to remain
	dedicated to the recycling, management services, and equipment industry
	while sustaining steady growth at an acceptable profit, adding to our net
	worth, and providing positive returns for stockholders.  We intend to
	increase efficiencies and productivity in our core business while remaining
	alert for possible acquisitions, strategic partnerships, mergers and
	joint-ventures that would enhance our profitability.  20     We have operating locations
	in Louisville, Kentucky, Seymour, Indiana, New Albany, Indiana,  Dallas,
	Texas and Mobile, Alabama.  We do not have operating locations outside the
	United States.   Liquidity and Capital
	Resources  As of March 31, 2009 we
	held cash and cash equivalents of $866,389.  We currently maintain a
	$10.0 million senior revolving credit facility with the BB&T.  This
	revolving credit facility has a three year term expiring January 1, 2012,  
	provides for advances of up to eighty percent (80%) of our eligible accounts
	receivable and up to thirty five percent (35%) of eligible inventory, and up
	to one hundred percent (100%) of our net book value of eligible equipment
	less an outstanding indebtedness on the equipment.  The revolving credit
	facility bears interest at the one month LIBOR rate, as published in the
	Wall Street Journal, plus two and twenty-five one-hundredths percent (2.25%)
	per annum, and is secured by all our assets (except rental fleet
	equipment).  The revolving credit facility contains certain restrictive and
	financial covenants.  At March 31, 2009, we were in compliance with all
	restrictive covenants and the entire amount of our credit facility less our
	outstanding borrowings of $2,500,000 was available for borrowings.  On February 11, 2009, we
	executed a promissory note, loan agreement and related security documents
	with BB&T in the amount of $12,000,000 for the purpose of financing our
	acquisition of inventory and fixed assets from Venture Metals, and real
	estate at 3409 Camp Ground Road, Louisville, Kentucky, from Luca
	Investments, LLC, an affiliate of Venture Metals.  The maturity date of this
	note is February 11, 2010.  Interest is payable monthly commencing March 11,
	2009, and the note shall bear interest at the adjusted LIBOR rate of one
	month LIBOR plus 2.25% per annum with a floor of 4%.  As of February 11,
	2009, the applicable interest rate was 4% since the calculated rate was
	2.67%.  All our assets (except rental fleet equipment) secure this note.  As
	a result of this note and related loan documents, we and BB&T undertook
	amendments to existing security agreements related to the $10,000,000 senior
	revolving credit facility with BB&T, and a $6,000,000 equipment loan to
	purchase our shredder system and complimentary facility improvements so as
	to provide that the security for each of the above loans also secures the
	$12,000,000 loan.  On May 14, 2008, we executed
	a loan agreement with BB&T in the amount of $3.0 million secured by our
	rental fleet equipment.  This note replaces the $2.0 million rental fleet
	loan with Fifth Third Bank.  Until October 15, 2008, indebtedness under this
	loan agreement accrued interest at the one month Libor rate, as published in
	the Wall Street Journal, plus 1.625% per annum.  Fifty-nine (59) monthly
	principal and interest payments of $30,966.76 commenced on June 7, 2008 with
	one final payment of all remaining principal and accrued interest due on May
	7, 2013.  Effective October 15, 2008, we converted this revolving credit
	facility with a variable interest rate into a fixed interest rate of 5.65%
	by executing a floating to fixed interest rate swap with BB&T as the
	counterparty to the ISDA Master Agreement, Schedule and confirmation.  The
	maturity date under this revised agreement is May 2013.  The repayment terms
	are principal paid in twelve (12) monthly payments of $19,673.54 plus
	interest commencing on November 7, 2008 and continuing through October 7,
	2009, principal paid in 12 monthly payments of $20,835.07  21     plus interest
	commencing on November 7, 2009 and continuing through October 7, 2010,
	principal paid in 12 monthly payments of $22,065.17 plus interest commencing
	on November 7, 2010 and continuing through October 7, 2011, principal paid
	in 12 monthly payments of $23,367.89 plus interest commencing on November 7,
	2011 and continuing through October 7, 2012, principal paid in six (6)
	monthly payments of $24,747.53 plus interest commencing on November 7, 2012
	and continuing through April 7, 2013, with one final payment of all
	remaining principal and accrued interest due at maturity on May 7, 2013. 
	The principal and interest payments of this facility are calculated on the
	basis of a ten (10) year amortization, resulting in a principal balance of
	approximately $1.7 million due at maturity.  The terms of the loan agreement
	place certain restrictive covenants on us, including maintenance of a
	specified tangible net worth, debt to net worth and EBITDA ratio. 
	Consequently, these covenants restrict our ability to incur as much
	additional debt as we may desire for future growth.  At March 31, 2009, we
	were in compliance with all restrictive covenants.  On May 14, 2008, we executed
	a loan agreement with BB&T in the amount of $6.0 million to finance the
	purchase of our shredder system and complementary facility improvements. 
	The security for this facility is the shredder and assets being purchased. 
	Our Board approved the acquisition and installation of the shredder system
	and complementary facility improvements on June 21, 2007.  The note has a
	term beginning May 2008 and originally expiring November 2013.  Until
	October 15, 2008, the facility bore interest at the one month Libor rate, as
	published in the Wall Street Journal, plus 1.625% per annum.  The facility
	originally provided for interest only monthly payments which commenced June
	7, 2008 and continued through November 7, 2008.  Effective October 15, 2008,
	we converted this revolving credit facility into a fixed interest rate of
	5.89% by executing a floating to fixed interest rate swap with BB&T as the
	counterparty to the ISDA Master Agreement, Schedule and confirmation.  The
	maturity date under this revised agreement is April 2014.  The repayment
	terms are interest only paid in 6 monthly payments starting on November 7,
	2008 and continuing through April 7, 2009, principal paid in twelve (12)
	monthly payments of $37,636.11 plus interest commencing on May 7, 2009 and
	continuing through April 7, 2010, principal paid in 12 monthly payments of
	$39,957.42 plus interest commencing on May 7, 2010 and continuing through
	April 7, 2011, principal paid in 12 monthly payments of $42,421.91 plus
	interest commencing on May 7, 2011 and continuing through April 7, 2012,
	principal paid in 12 monthly payments of $45,038.40 plus interest commencing
	on May 7, 2012 and continuing through April 7, 2013, principal paid in
	eleven (11) monthly payments of $47,816.27 plus interest commencing on May
	7, 2013 and continuing through March 7, 2014, with one final payment of all
	remaining principal and accrued interest due at maturity on April 7, 2014. 
	The principal and interest payments of the facility are calculated on the
	basis of a ten (10) year amortization, resulting in a principal balance of
	approximately $3.5 million being due on or before April 7, 2014, at which
	time we anticipate that we will refinance.  The terms of the loan agreement
	place certain restrictive covenants on us, including maintenance of a
	specified tangible net worth, debt to net worth and EBITDA ratio. 
	Consequently, these covenants restrict our ability to incur as much
	additional debt as we may desire for future growth.  At March 31, 2009, we
	were in compliance with all restrictive covenants.  22    On August 2, 2007, we
	entered into an asset purchase agreement for $1,300,000 funded primarily by
	a note payable to Industrial Logistic Services, LLC, the sole member of
	which is Brian Donaghy, our president and chief operating officer, whereby
	we pay $20,000 per month for 60 months for various assets including tractor
	trailers, trucks and containers.  The note payable reflects a seven percent
	(7%) interest payment on the outstanding balance plus principal
	amortization.  We also paid ILS $100,000 cash as a portion of the purchase
	price at the time of execution of the asset purchase agreement.  We recorded
	a note payable of $1,010,040 with an outstanding balance at December 31,
	2008, of $774,161.  During the first quarter of
	2009, we purchased $1,719,843 of property and equipment.  We spent $324,845
	on building improvements.  In the recycling segment we spent $1,129,838 for
	cranes, forklifts, a loader, a scale and other operating equipment.  In the
	equipment sales, leasing and service segment, we purchased $102,584 in
	rental equipment that we located at customer sites.  This rental fleet
	equipment consists of solid waste handling and recycling equipment such as
	compactors, pre-crushers, containers and balers. It is our intention to
	continue to pursue this market.  We purchased office equipment of $116,633
	and vehicles of $45,943.  Additionally, we made purchases for the shredder
	system of $1,210,493.  We implemented the use of a
	purchasing card with a credit limit of $6.0 million in the second quarter of
	2004.  We have included the balance due on the purchasing card as part of
	accounts payable.  The outstanding balance on the purchasing card at March
	31, 2009 was $564,000 with a due date of April 26, 2009.  The card accrues
	interest at prime plus 5.9% after the first twenty-five days of the
	purchase; our intention is to pay off the full balance every month so as to
	not incur finance charges.  To date we have not incurred any interest
	charges on this purchasing card.  The card requires monthly minimum payments
	on any balance outstanding at month end.  We receive rebates on an annual
	basis for all purchases made with the card.  We expect that existing
	cash flow from operations and available credit under our existing credit
	facilities will be sufficient to meet our cash needs in 2009.  Results of Operations  The following table
	presents, for the years indicated, the percentage relationship that certain
	captioned items in our Consolidated Statements of Operations bear to total
	revenues and other pertinent data:  Quarter ended March 31,2009
				
				2008Statements of Operations Data:Total Revenue
				....................................................................................
				100.0%
				
				100.0%Cost of goods sold...............................................................
				83.6%
				
				84.0%Selling, general and administrative expenses.........................
				11.2%
				
				8.8%Income before other
				expenses.............................................................
				5.2%
				
				7.2%
  23    Three months ended
	March 31, 2009 compared to three months ended March 31, 2008  Total revenue decreased
	$1,833,472 or 7.0% to $24,249,923 in 2009 compared to $26,083,395 in 2008. 
	ISA Alloys increased from zero in 2008 to $15,097,830 in 2009 since it is a
	newly acquired business.  Recycling revenue decreased $14,719,912 or 71.2%
	to $5,953,805 in 2009 compared to $20,673,717 in 2008.  This is primarily
	due to a decrease of 41% in pricing and 42% in the volume of ferrous
	shipments, and a decrease of 52% in pricing and 45% in the volume of
	nonferrous shipments.  Management services revenue decreased $2,226,974 or
	45.7% to $2,645,568 in 2009 compared to $4,872,542 in 2008.  This is
	primarily due to a decrease in the number of customer locations managed,
	including the loss of customers Circuit City and Mervyn's.  Equipment,
	service and leasing revenue increased $15,584 or 2.9% to $552,720 in 2009
	compared to $537,136 in 2008.  This increase is due to an increase in rental
	revenue.  Total cost of goods sold
	decreased $1,630,357 or 7.4% to $20,265,118 in 2009 compared to $21,895,475
	in 2008.  Recycling cost of goods sold decreased $11,920,694 or 67.3% to
	$5,790,179 in 2009 compared to $17,710,873 in 2008.  This is due to a
	decrease of 36.5% in the volume and a decrease of 43% in the pricing of
	purchases.  Management services cost of goods sold decreased $1,719,998 or
	43.2% to $2,262,929 in 2009 compared to $3,982,927 in 2008 primarily due to
	a decrease in the number of customer locations managed, including the loss
	of customers Circuit City and Mervyn's.  Equipment, service and leasing cost
	of goods sold decreased $3,416 or 1.7% to $198,259 in 2009 compared to
	$201,675 in 2008.  We have reclassified certain expenses in our income
	statement to more accurately reflect segment performance and we have
	restated cost of goods sold and selling, general and administrative expenses
	for the quarter ended March 31, 2008 to be consistent with current
	presentation.  These reclassifications had no effect on previously reported net income.  Selling, general and
	administrative expenses increased $406,636 or 17.7% to $2,709,661 in 2009
	compared to $2,303,025 in 2008.  As a percentage of revenue, selling,
	general and administrative expenses were 11.2% in 2009 compared to 8.8% in
	2008.  The percentage of revenue increase is due primarily to the legal,
	accounting and diligence costs associated with the acquisition of ISA Alloys
	and a new manager hired for WESSCO.  Other expense increased $111,062 to $185,039 in 2009
	compared to $73,977 in 2008.  This was primarily due to an additional
	$65,597 paid in the All-American legal settlement and an increase in
	interest expense of $44,939 because of our higher debt balances.  The income tax provision decreased $288,325 to
	$436,042 in 2009 compared to $724,367 in 2008.  As a percentage of income
	before income taxes, the income tax provision was 40% in 2009  compared to
	40% in 2008.  Financial condition at March 31, 2009
	compared to December 31, 2008  Cash and cash equivalents
	decreased $237,453 to $866,389 as of March 31, 2009 compared to $1,103,842
	as of December 31, 2008.  24    We used net cash from
	operating activities of $2,334,624 for the quarter ended March 31, 2009. 
	This was primarily due to $8,128,716 in accounts receivable offset by inventories
	of $6,087,742 in the first quarter of 2009.  Our acquisition of the
	inventory of Venture metals is reflected below in net cash from investing
	activities.  We used net cash from
	investing activities of $11,763,949 for the quarter ending March 31, 2009. 
	We made purchases for the shredder system of $1,210,492, we
	purchased property and equipment of $1,719,843 and we acquired $8,846,794 in
	inventory from Venture Metals.  Our net cash from financing
	activities of $13,861,120 for the quarter ended March 31, 2009 is primarily
	due to new long term debt as described in Note 3 of our financial statements
	and advances of existing long term debt of $14,033,750, offset by payments
	on debt of $198,296.  Accounts receivable trade
	increased $8,128,716 or 213% to $11,940,200 as of March 31, 2009 compared to
	$3,811,484 as of December 31, 2008.  This change is primarily due to our
	acquisition of ISA Alloys; as of March 31, 2009, ISA Alloys accounts
	receivable balance was approximately $8.3 million.  Inventories consist
	principally of stainless steel alloys, ferrous and nonferrous scrap
	materials and waste equipment machinery held for resale.  We value inventory
	at the lower of cost or market.  Inventory increased $2,759,052 or 63.1% to
	$7,130,400 as of March 31, 2009 compared to $4,371,348 as of December 31,
	2008.  The increase is primarily due to our acquisition of ISA Alloys, whose
	inventory balance was approximately $3.2 million as of March 31, 2009.  Inventory aging for the quarter ended March 31, 2009
	(Days Outstanding):  Description
				
				1-30
				
				31-60
				
				61-90
				
				Over 90
				
				TotalWaste
				equipment machinery
				
				$    100,487
				
				$            -
				
				$           -
				
				$           -
				
				$   100,487Stainless
				steel alloys
				
				3,247,990
				
				
				
				
				
				
				
				3,247,990Ferrous
				materials
				
				1,352,062
				
				358,826
				
				163,852
				
				300,009
				
				2,174,749Non-ferrous
				materials
				
				818,242
				
				99,920
				
				65,906
				
				549,881
				
				1,533,949Other
				
				73,225
				
				-
				
				-
				
				-
				
				73,225$ 5,592,006
				
				$ 458,746
				
				$ 229,758
				
				$ 849,890
				
				$7,130,400
  Inventory aging for the year ended December 31, 2008
	(Days Outstanding):  Description
				
				1-30
				
				31-60
				
				61-90
				
				Over 90
				
				TotalWaste
				equipment machinery
				
				$     95,675
				
				$              -
				
				$           -
				
				$          -
				
				$     95,675Ferrous
				Materials
				
				1,364,091
				
				376,684
				
				326,874
				
				94,500
				
				2,162,149Non-ferrous
				materials
				
				990,843
				
				217,591
				
				294,992
				
				529,728
				
				2,033,154Other
				
				80,370
				
				-
				
				-
				
				-
				
				80,370$2,530,979
				
				$   594,275
				
				$ 621,866
				
				$624,228
				
				$4,371,348
  Accounts payable trade
	decreased $709,380 or 19% to $2,992,515 as of March 31, 2009 compared to
	$3,701,895 as of December 31, 2008, primarily due to market conditions.  25    Working capital increased
	$3,064,024 to $6,052,896 as of March 31, 2009 compared to $2,988,872 as of
	December 31, 2008.  The increase was primarily driven by the $8.1 million
	increase in accounts receivable, the $2.8 million increase in inventory and
	the $0.7 million decrease in accounts payable, offset by the $9.1 million
	increase in current maturities of long term debt.  Contractual Obligations  The following table provides
	information with respect to our known contractual obligations for the
	quarter ended March 31, 2009.  Obligation Description
				Total
				Less
				than 1 year
				1-3 years
				3-5 years
				More
				than 5 yearsLong-Term Debt Obligations
				$23,244,076
				$10,013,185
				$6,127,723
				$7,103,168
				$0Capital Lease Obligations (1)
				86,490
				78,732
				7,758
				0
				0Operating Lease Obligations (2)
				2,419,817
				668,978
				1,273,839
				477,000
				0Total
				$25,750,383
				$10,760,895
				$7,409,320
				$
				7,580,168
				$0
  (1)   
	We lease various pieces of equipment that qualify for capital lease
	treatment.  These lease arrangements require monthly lease payments expiring
	at various dates through June 2010.  (2)     We lease the Louisville, Kentucky
	facility from a related party under an operating lease expiring December
	2012 with automatic annual renewals thereafter unless one party provides
	written notice to the other party of its intent not to renew at least six
	months in advance of the next renewal date.  We have monthly rental payments
	of $48,500 through December 2012.  In the event of a change of control, the
	monthly payments become $62,500.  We also lease a management services
	operations facility and various pieces of equipment in Dallas, Texas for
	which monthly payments of $2,750 are due through September 2009.  We have subleased the Lexington
	property to an unaffiliated third party for a term commencing March 1, 2007
	and ending December 31, 2012 for $4,500 per month.   We currently lease this
	property from an unrelated party for $4,500 per month, which terminates
	December 31, 2012.  If for any reason the sublessee defaults, we remain
	liable for the remainder of the lease payments through December 31, 2012.  Long-term debt increased
	$13,876,199 to $23,244,076 as of March 31, 2009 compared to $9,367,877 as of
	December 31, 2008.  26    Impact of Recently Issued Accounting Standards  FAS
	141R, Business Combinations, was issued in December 2007 and applies
	prospectively to business combinations for which the acquisition date is on
	or after the beginning of the first annual reporting period beginning on or
	after December 15, 2008, which for us is January 1, 2009.  The objective
	of FAS 141R is to improve the relevance, representational faithfulness, and
	comparability of the information that a reporting entity provides in its
	financial reports about a business combination and its effects. This
	statement requires us as an acquirer of the assets of Venture Metals to
	recognize the assets acquired, the liabilities assumed, and any
	noncontrolling interest in the Venture Metals at the acquisition date,
	measured at their fair values as of that date, with limited exceptions
	specified in the statement.  Refer to Notes 9 and 10 of our financial
	statements for more detailed information about our acquisition of Venture
	Metals.  In
	February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
	Financial Assets and Financial Liabilities" ("SFAS 159"). SFAS 159 provides
	companies with an option to report selected financial assets and financial
	liabilities at fair value. Unrealized gains and losses on items for which
	the fair value option has been elected are reported in earnings at each
	subsequent reporting date. SFAS 159 is effective for fiscal years beginning
	after November 15, 2007, the year beginning January 1, 2008 for us. While we
	continue to review the provisions of SFAS 159, we have not yet identified
	any assets or liabilities for which we currently believe we will elect the
	fair value reporting option.  In March 2008, the FASB
	issued SFAS No. 161, "Disclosures about Derivative Instruments and Hedging
	Activities" ("SFAS 161").  SFAS 161 amends and expands the disclosure
	requirements in SFAS 133, "Accounting for Derivative Instruments and Hedging
	Activities".  SFAS 161 is effective for fiscal years and interim periods
	beginning after November 15, 2008, the year beginning January 1, 2009 for
	us.  In April 2009, the FASB
	issued FSP No. FAS 157-4 ("FSP FAS 157-4"), "Determining Fair Value When the
	Volume and Level of Activity for the Asset or Liability has Significantly
	Decreased and Identifying Transactions That Are Not Orderly" and FSP No. FAS
	115-2 and FAS 124-2 ("FSP FAS 115-2"), "Recognition and Presentation of
	Other-Than-Temporary Impairments".  These two FSPs were issued to provide
	additional guidance about (1) measuring the fair value of financial
	instruments when the markets become inactive and quoted prices may reflect
	distressed transactions, and (2) recording impairment charges on investments
	in debt instruments.  Additionally, the FASB issued FSP No. FAS 107-1 and
	APB 28-1 ("FSP FAS 107-1"), "Interim Disclosures about Fair Value of
	Financial Instruments," to require disclosures of fair value of certain
	financial instruments in interim financial statements.  We do not anticipate
	the adoption of these FSPs will materially impact us.  These FSPs are
	effective for financial statements issued for interim and annual reporting
	periods ending after June 15, 2009, the quarter ending June 30, 2009 for us.  27    ITEM 3: 
	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.  Fluctuating commodity prices
	affect market risk in our recycling segment.  We mitigate this risk by
	selling our product on a monthly contract basis.  Each month we negotiate
	selling prices for all commodities.  Based on these monthly agreements, we
	determine purchase prices based on a margin needed to cover processing and
	administrative expenses.  We are exposed to commodity
	price risk, mainly associated with variations in the market price for
	ferrous and nonferrous metal, and other commodities. The timing and
	magnitude of industry cycles are difficult to predict and are impacted by
	general economic conditions. We respond to changes in recycled metal selling
	prices by adjusting purchase prices on a timely basis and by turning rather
	than holding inventory in expectation of higher prices.  However, financial
	results may be negatively impacted where selling prices fall more quickly
	than purchase price adjustments can be made or when levels of inventory have
	an anticipated net realizable value that is below average cost.  We are exposed to interest
	rate risk on our floating rate borrowings. We maintain a $10.0 million
	senior revolving credit facility with the BB&T which had $2,500,000 in
	outstanding borrowings as of March 31, 2009.  This revolving credit facility
	bears interest at the one month LIBOR rate, as published in the Wall Street
	Journal, plus two and twenty-five one-hundredths percent (2.25%) per annum
	which was 4.0% as of March 31, 2009.   On February 11, 2009, we executed a
	promissory note with BB&T in the amount of $12,000,000 for the purpose of
	financing our acquisition of inventory and fixed assets from Venture Metals,
	and real estate at 3409 Camp Ground Road, Louisville, Kentucky, from Luca
	Investments, LLC, an affiliate of Venture Metals.  This note bears interest
	at the adjusted LIBOR rate of one month LIBOR plus 2.25% per annum with a
	floor of 4%.  As of March 31, 2009, the applicable interest rate was 4%.
	Based on our average anticipated borrowings under our credit agreements in
	fiscal 2009, a hypothetical increase or decrease in the LIBOR rate by 1%
	would increase or decrease interest expense on our variable borrowings by 1%
	of the outstanding balance, with a corresponding change in cash flows.  Last year, we entered into three interest rate swap agreements swapping
	variable rates for fixed rates. The first swap agreement covers $6 million
	in debt and commenced October 15, 2008 and matures on April 7, 2014. The
	second swap agreement covers approximately $2.9 million in debt and
	commenced October 15, 2008 and matures on May 7, 2013.  The third swap
	agreement covers $606,027 in debt and commenced October 22, 2008 and matures
	on October 22, 2013.  The three swap agreements fix our interest rate
	at approximately 5.8%.  At March 31, 2009, we recorded the estimated
	fair value of the three swaps at approximately $816,000.  We entered
	into the swap agreements for the purpose of hedging the interest rate market
	risk for the respective notional amounts.  28    We are exposed to market
	risk from changes in interest rates in the normal course of business. Our
	interest income and expense are most sensitive to changes in the general
	level of U.S. interest rates and the LIBOR rate. In order to manage this
	exposure, we use a combination of debt instruments, including the use of
	derivatives in the form of interest rate swap agreements. We do not enter
	into any derivatives for trading purposes.  The use of the interest rate
	swap agreement is intended to convert the variable rate to a fixed rate.  ITEM 4(T):  CONTROLS AND PROCEDURES  (a)        Disclosure controls and procedures.  ISA's management,
	including ISA's principal executive officer and principal financial officer,
	have evaluated the effectiveness of our "disclosure controls and
	procedures," as such term is defined in Rule 13a-15(e) promulgated under the
	Securities Exchange Act of 1934.  Based upon their evaluation, our principal
	executive officer and principal financial officer concluded that, as of
	March 31, 2009, ISA's disclosure controls and procedures were effective for
	the purpose of ensuring that the information required to be disclosed in the
	reports that ISA files under the Exchange Act with the Securities and
	Exchange Commission  (1) is recorded, processed, summarized and reported
	within the time periods specific in the SEC's rules and forms, and (2) is
	accumulated and communicated to ISA's management, including our principal
	executive and principal financial officers, as appropriate to allow timely
	decisions regarding the required disclosure.  (b)        Internal controls
	over financial reporting.  Our management is
	responsible for establishing and maintaining adequate internal control over
	financial reporting (as such term is defined in Rules 13a-15(f) and
	15d-15(f) of the Exchange Act).  Our internal control over financial
	reporting is designed to provide reasonable assurance to our management and
	Board of Directors regarding the reliability of financial reporting and the
	preparation and fair presentation of published financial statements for
	external purposes in accordance with generally accepted accounting
	principles in the United States.  Our internal control
	over financial reporting includes those policies and procedures that:  --          pertain
	to the maintenance of records that, in reasonable detail, accurately and
	fairly reflect our transactions and dispositions of our assets;  --          provide
	reasonable assurance that our transactions are recorded as necessary to
	permit preparation of our financial statements in accordance with GAAP, and
	that our receipts and expenditures are being made only in accordance with
	authorizations of our management and directors; and  --          provide
	reasonable assurance regarding prevention or timely detection of
	unauthorized acquisition, use, or disposition of our assets that could have
	a material effect on our financial statements.  29    Because of its
	inherent limitations, internal control over financial reporting cannot
	prevent or detect every potential misstatement.  Therefore, even those
	systems determined to be effective can provide only reasonable assurances
	with respect to financial statement preparation and presentation.  Also,
	projections of any evaluation of effectiveness to future periods are subject
	to the risk that controls may become inadequate because of changes in
	conditions, or that the degree of compliance with the policies or procedures
	may decline.  Our management
	conducted an evaluation of the effectiveness of our internal control over
	financial reporting, based on the framework and criteria established in
	Internal Control -- Integrated Framework, issued by the Committee of
	Sponsoring Organizations of the Treadway Commission.  Based on this
	evaluation, our management assessed the effectiveness of our internal
	control over financial reporting for the quarter ended March 31, 2009, and
	concluded that such internal control over financial reporting was effective
	as of March 31, 2009.  This Report on Form
	10-Q does not include an attestation report of our registered public
	accounting firm regarding internal control over financial reporting. 
	Management's report was not subject to attestation by our registered public
	accounting firm pursuant to temporary rules of the SEC that require only
	management's report in this Report on Form 10-Q.  (c)     Changes to internal control over
	financial reporting  With the exception
	noted below, there were no changes in ISA's internal control over financial
	reporting during the three months ended March 31, 2009 that have materially
	affected, or are reasonably likely to affect ISA's internal control over
	financial reporting.  During the three
	months ended March 31, 2009, ISA acquired the assets of Venture Metals, LLC,
	in order to form a new ISA business segment called ISA Alloys, a stainless
	steel and alloys business.  ISA has not yet conducted an assessment of ISA
	Alloy's internal controls over financial reporting for the period between
	the consummation date and March 31, 2009, the date of our management's
	assessment.  As such, we have excluded the ISA Alloys from our management's
	report on internal control over financial reporting.  During the first
	quarter of 2009, ISA Alloys represented 62% of our total consolidated
	revenues.




30



---



PART II -- OTHER INFORMATION   Item 1.    Legal Proceedings  In May 2006, All American
	Recycling, known as AAR, and its owners, R.D. Burton and Donna Burton filed
	a lawsuit in Jefferson County, Kentucky Circuit Court against us and K&R
	Resources LLC (All American Recycling, Inc. and R.D. Burton and Donna Burton
	v. Industrial Services of America, Inc., et. al., Jefferson Circuit Court,
	Case No. 06-C-04701), as further described in the Form 10-Q for the period
	ended September 30, 2008.  Both parties entered into a settlement agreement
	as described in the Form 8-K dated February 18, 2009.  By March 31, 2009 AAR had vacated the premises at Grade Lane, Louisville,
	Kentucky that it had subleased from us pursuant to the settlement agreement
	we entered into with AAR on February 2, 2009.  In connection with our expressed intention set forth in the February 18,
	2009, Form 8‐K, we have renovated the Camp
	Ground Road facility and it is now a full-service yard providing ferrous,
	non-ferrous and stainless material for the Grade Lane operations.  After AAR
	vacated the Grade Lane premises, we began construction on the facilities
	necessary for us to relocate the stainless steel inventory operations of
	Venture Metals from the Camp Ground Road location.  On January 4, 2007, Lennox
	Industries, Inc., a commercial heating and air-conditioning manufacturer,
	filed suit against us in the Arkansas County, Arkansas Circuit Court in the
	case styled Lennox Industries, Inc. v. Industrial Services of America, Inc.,
	Case No. CV-2007-004.  Because of settlement negotiations, Lennox did not
	serve us until May 23, 2007.  Lennox alleges that we breached a 2001
	contract with Lennox where we agreed to act as agent for Lennox, by our
	failure to properly evaluate, categorize, classify and value the production
	scrap and waste of Lennox, thereby brokering such products at prices below
	market value.  Lennox also alleges negligence and breach of fiduciary duty
	related to the same alleged failure.  Lennox is taking the position that ISA
	had a duty to obtain a price that was consistent with the materials being
	sold on their behalf and that it failed to show a proper duty of care in its
	dealings with Lennox.   On July 9, 2008, Lennox amended its Complaint to add
	a cause of action based on fraud and misrepresentation (civil fraud).  The
	Lennox complaint does not state any specific monetary damages.  We have
	filed an answer denying all claims.  The litigation is in its discovery
	phase with a trial date currently set for August  2009.   We currently
	believe that the claims have no merit.  We have other litigation
	from time to time, including employee or former employee claims, none of
	which we believe to be material.  31    Item 1A. Risk Factors  We have had no material
	changes from the risk factors reported in our Form 10-K for the year ended
	December 31, 2008, as filed with the Securities and Exchange Commission on
	March 31, 2009.  Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds  On November 15, 2005, our
	Board of Directors authorized a program to repurchase up to 200,000 shares
	of our common stock at current market prices.  In 2008 we repurchased 55,607
	shares, in 2007 we repurchased 40,000 shares, in 2006 we repurchased 5,509
	shares and in 2005 we repurchased 10,000 shares.  We repurchased 673,400
	shares of our common stock in a prior stock repurchase program that began in
	August 2000.  Issuer Purchases of Equity Securities  Period
				Total Number
				Average Price
				Total Number of
				Shares
				Maximum Number ofof Shares
				Paid per Share
				Purchased as part of
				Shares that may yet
				bePurchased
				
				Publicly Announced
				Purchased Under thePlans or Programs
				Plans or ProgramsOct-05
				-Nov-05
				10,000
				$ 2.9762
				10,000
				190,000Dec-05
				-Jan-06
				5,509
				$ 2.9658
				15,509
				184,491Aug-07
				20,000
				$ 9.9229
				35,509
				164,491Dec-07
				20,000
				$ 7.7257
				55,509
				144,491Mar-08
				19,753
				$ 8.2823
				75,262
				124,738May-08
				9,854
				$ 11.4170
				85,116
				114,884Sept-08
				26,000
				$ 9.790
				111,116
				88,884
   Item 3.    Defaults upon Senior Securities  None  Item 4.    Submission of Matters to a Vote of Security Holders  None  32    Item 5.    Other Information  None  Item 6.    Exhibits  See exhibit
	index  33     SIGNATURES  Pursuant to the requirements of the Securities Exchange Act of 1934, the
	Registrant has duly caused this report to be signed on its behalf by the
	undersigned thereunto duly authorized.   INDUSTRIAL SERVICES OF AMERICA, INC.Date:  May 15, 2009
				/s/  Harry KletterChairman and Chief Executive Officer(Principal Executive and FinancialOfficer)Date:  May 15, 2009
				/s/ Alan L. SchroeringChief Financial Officer
  34     INDEX TO EXHIBITSExhibit Number
				
				Description of Exhibits31.1
				
				Rule 13a-14(a) Certification of Harry
				Kletter for the Form 10-Q for the quarter ended March 31, 2009.31.2
				
				Rule 13a-14(a) Certification of Alan
				Schroering for the Form 10-Q for the quarter ended March 31,
				2009.32.1
				
				Section 1350 Certification of Harry Kletter
				and Alan Schroering for the Form 10-Q for the quarter ended
				March 31, 2009






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