The following discussion and analysis should be read in conjunction with our unaudited condensed 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, a significant downturn in the economy 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, 2007, as filed with the Securities and Exchange Commission.

General

We are primarily focusing our attention now and in the future towards our recycling business segment. 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.

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 2,300 customer locations throughout the United States and we utilize an active database of over 6,600 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.

We have operating locations in Louisville, Kentucky, Seymour, Indiana, New Albany, Indiana and Dallas, Texas. We do not have operating locations outside the United States.

Liquidity and Capital Resources

As of September 30, 2008 we held cash and cash equivalents of $3,060,139.

We currently maintain a $10.0 million senior revolving credit facility with the Branch Banking and Trust Company. This revolving credit facility has a three year term expiring December 22, 2009, provides for advances of up to eighty percent (80%) of our eligible accounts receivable and up to forty percent (40%) 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, which was 6.25% as of September 30, 2008, and is secured by all our assets (except rental fleet equipment). The balance of the credit facility at September 30, 2008 was $4,027,002. The revolving credit facility contains certain restrictive and financial covenants. At September 30, 2008, we were in compliance with all restrictive covenants and the entire amount of our credit facility less our outstanding borrowings was available for borrowings. On October 2, 2008 we paid $2,000,000 to decrease the balance of the credit facility to $2,027,002.

On August 2, 2007, we entered into an asset purchase agreement for $1,300,000 funded primarily by a note payable to ILS, 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 recorded a note payable of $1,010,040 with an outstanding balance at September 30, 2008 of $820,076.

On May 14, 2008, we executed a new loan agreement with Branch Banking and Trust Company 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. As of September 30, 2008 we had borrowed $2,897,114 against this loan. 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 September 30, 2008, we were in compliance with all restrictive covenants.

On May 14, 2008, we executed a new loan agreement with Branch Banking and Trust Company in the amount of $6.0 million to finance the purchase of our shredder system and complimentary 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 complimentary 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 continue 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. As of September 30, 2008 we had borrowed $3,513,703 against this loan. 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 September 30, 2008, we were in compliance with all restrictive covenants.

During the first three quarters of 2008, we paid $2,453,593 for land, improvements, property and equipment. We paid $1,190,000 for the land and building at 6709 Grade Lane. We paid $135,579 for other buildings and improvements. In the recycling segment we paid $414,073 for cranes, a forklift, shear rebuild, scales, trailers, grapple and other operating equipment. In the equipment sales, leasing and service segment, we purchased $458,374 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 $50,760 of office equipment and $204,807 in vehicles.

We have a purchasing card with a credit limit of $6.0 million. We included the balance due on the purchasing card as part of accounts payable. The outstanding balance on the purchasing card at September 30, 2008 was $777,389 with a due date of October 27, 2008. 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 during the remainder of 2008.

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:

                                                                                   Nine months ended
                                                                                     September 30,
                                                                                    2008       2007
Statements of Operations Data:
Total Revenue                                                                      100.0%     100.0%
..................................................................................
Cost of goods                                                                       83.8%      85.2%
sold............................................................................
Selling, general and administrative expenses                                         8.8%       8.7%
......................................
Income before other                                                                  7.4%       6.1%
expenses...........................................................

Nine months ended September 30, 2008 compared to nine months ended September 30, 2007

Total revenue increased $34,070,653 or 61.5% to $89,432,308 in 2008 compared to $55,361,655 in 2007. Recycling revenue increased $31,920,292 or 76.0% to $73,936,140 in 2008 compared to $42,015,848 in 2007. This is primarily due to a 43% increase in price of commodities in the recycling market and a 14% increase in volume of shipments. Management services revenue increased $1,955,121 or 16.6% to $13,759,177 in 2008 compared to $11,804,056 in 2007 primarily due to an increase in the number of customer locations managed. Equipment sales, service and leasing revenue increased $195,240 or 12.7% to $1,736,991 in 2008 compared to $1,541,751 in 2007. This increase is due to an increase in rental revenue because of more equipment rentals and an increase in equipment sales.

Total cost of goods sold increased $27,732,306 or 58.8% to $74,931,675 in 2008 compared to $47,199,369 in 2007. Recycling cost of goods sold increased $25,185,176 or 69.4% to $61,465,322 in 2008 compared to $36,280,146 in 2007. This is primarily due to a 25% higher volume of purchases in the recycling market. Management services cost of goods sold increased $2,531,880 or 24.6% to $12,821,444 in 2008 compared to $10,289,564 in 2007 primarily due to an increase in the number of customer locations managed. Additionally, we reduced cost of goods sold by $0 in 2008 and by $480,060 in 2007 due to a change in management's estimate related to the liability associated with this operation which includes the contract settlement with our former customers. Equipment sales, service and leasing cost of goods sold increased $15,250 or 2.4% to $644,909 in 2008 compared to $629,659 in 2007.

Selling, general and administrative expenses increased $3,056,836 or 63.6% to $7,861,160 in 2008 compared to $4,804,324 in 2007. As a percentage of revenue, selling, general and administrative expenses were 8.8% in 2008 compared to 8.7% in 2007. The primary driver of the increase in total expenses is an increase in ISA Logistics expenses of $1.8 million, Sarbanes Oxley expense of $108,830 and rising fuel expenditures. We acquired ILS in August 2007.

Other income/(expense) increased $168,025 to other income of $76,024 in 2008 compared to other expense of $(92,001) in 2007. This was primarily due to the reduction of accounts payable of $156,400 and other income of $117,306 due to an insurance reimbursement.

Income tax provision increased $1,417,776 to $2,686,199 in 2008 compared to $1,268,423 in 2007. The effective tax rate in 2008 was 40.0% compared to 38.8% in 2007 based on federal and state statutory rates.

Three months ended September 30, 2008 compared to three months ended September 30, 2007

Total revenue increased $10,909,018 or 60.8 % to $28,837,828 in 2008 compared to $17,928,810 in 2007. Recycling revenue increased $10,272,012 or 78.3% to $23,392,074 in 2008 compared to $13,120,062 in 2007. This is primarily due to a 55% increase in price of commodities in the recycling market. Management services revenue increased $563,826 or 13.1% to $4,875,379 in 2008 compared to $4,311,553 in 2007 primarily due to an increase in the number of customer locations managed. Equipment sales, service and leasing revenue increased $73,180 or 14.7% to $570,375 in 2008 compared to $497,195 in 2007. This increase is due to an increase in rental revenue because of more equipment rentals and an increase in equipment sales.

Total cost of goods sold increased $8,842,580 or 57.1% to $24,327,669 in 2008 compared to $15,485,089 in 2007. Recycling cost of goods sold increased $7,747,875 or 65.8% to 19,529,154 in 2008 compared to $11,781,279 in 2007. This is due to 2% higher commodity purchase prices in the recycling market and a 40% increase in the volume of purchases. Management services cost of goods sold increased $1,074,181 or 30.7% to $4,578,407 in 2008 compared to $3,504,226 in 2007 primarily due to an increase in the number of customer locations managed. Additionally, we reduced cost of goods sold by $337,516 in 2007 due to a change in management's estimate related to the liability associated with this operation, which includes the contract settlement with our former customers. Equipment sales, service and leasing cost of goods sold increased $20,524 to $220,108 in 2008 compared to $199,584 in 2007.

Selling, general and administrative expenses increased $778,627 or 43.5% to $2,569,743 in 2008 compared to $1,791,116 in 2007. As a percentage of revenue, selling, general and administrative expenses were 8.9% in 2008 compared to 10% in 2007. The primary driver of the increase in total expense is ILS expenses, Sarbanes Oxley expenditures and fuel costs. We acquired ILS in August 2007.

Other income/(expense) increased $166,332 to other income of $115,449 in 2008 compared to other expense of ($50,883) in 2007 primarily due to the reduction of accounts payable of $156,400.

Income tax provision increased $557,187 to $775,750 in 2008 compared to $218,563 in 2007. The effective tax rate in 2008 was 37.7% compared to 36.3% in 2007 based on federal and state statutory rates.

Financial condition at September 30, 2008 compared to December 31, 2007

Cash and cash equivalents increased $1,558,454 to $3,060,139 as of September 30, 2008 compared to $1,501,685 as of December 31, 2007.

We generated net cash from operating activities of $5,167,015 for the nine months ended September 30, 2008 due to net income of $4.0 million and increases in current liabilities and deferred taxes.

We used net cash from investing activities of $5,289,971 for the nine months ended September 30, 2008. Primarily, we purchased recycling and rental fleet equipment and shredder system equipment of $5,399,953. The rental fleet equipment consists of solid waste handling and recycling equipment such as compactors, containers and balers. It is our intention to continue to pursue this market.

Our net cash from financing activities of $1,681,410 for the nine months ended September 30, 2008 is primarily due to the advance of $6,513,703 on our new lines of credit offset by payments on debt of $3,988,504.

Accounts receivable trade increased $2,069,243 or 30.6% to $8,834,094 as of September 30, 2008 compared to $6,764,851 as of December 31, 2007. This change is primarily due to an increase in selling prices in the recycling segment.

Inventories consist principally of ferrous and nonferrous scrap materials and waste equipment machinery held for resale. We value inventory at the lower of cost or market. Inventory increased $1,843,786 or 39.9% to $6,471,067 as of September 30, 2008 compared to $4,627,281 as of December 31, 2007.

We have recognized an inventory impairment of $25,123 for the third quarter ending September 30, 2008, based on the value of our inventories to the lower of average purchased cost or market. We have lowered our manufacturing activity. We are not currently offering our inventory for sale in the present market as we believe from a historical perspective that the market will see some improvement as we believe the supply of scrap material is limited. We believe we have the financial resources to withstand the present market conditions. We are looking forward to the opportunity to build our inventories for shredder processing at attractive prices.

Inventory aging for the period ended September 30, 2008 (Days Outstanding):

 Description                    1-30        31-60        61-90      Over 90          Total

 Waste equipment machinery   $   75,750    $       -    $      -    $      -     $  75,750
 Ferrous materials            2,400,791    1,003,721           -      37,874     3,442,386
 Non-ferrous materials        1,760,840      394,321     325,275     381,679     2,862,115
 Other                           90,816            -           -           -        90,816

                             $4,328,197   $1,398,042   $ 325,275   $ 419,553    $6,471,067

Inventory aging for the year ended December 31, 2007 (Days Outstanding):

 Description                    1-30        31-60        61-90      Over 90      Total

 Waste equipment machinery    $  36,498    $       -    $      -    $      -    $  36,498
 Ferrous Materials            1,163,306      566,774      78,183      40,182    1,848,445
 Non-ferrous materials        1,885,783      553,049     129,552     147,319    2,715,703
 Other                           26,635            -           -           -       26,635

                             $3,112,222   $1,119,823   $ 207,735   $ 187,501   $4,627,281

Accounts payable trade increased $201,692 or 4.4% to $4,867,323 as of September 30, 2008 compared to $4,665,631 as of December 31, 2007, primarily due to market conditions.

Working capital increased $2,850,303 to $10,790,343 as of September 30, 2008 compared to $7,940,040 as of December 31, 2007. The increase was primarily driven by the $2.0 million increase in accounts receivable, the $1.8 million increase in inventories and the $1.6 million increase in cash, offset by the $1.5 million in income tax payable.

Contractual Obligations



The following table provides information with respect to our known contractual
obligations for the quarter ended September 30, 2008.



Obligation Description       Total         Less      1-3 years  3-5 years    More
                                       than 1 year                          than 5
                                                                             years
Long-Term Debt
Obligations (1)           $11,257,896       $440,876 $8,496,259 $2,320,761    $0
Capital Lease Obligations
(2)                           121,932         81,451     40,481          0     0
Operating Lease
Obligations (3)             2,769,510        702,510  1,272,000    795,000     0
Total                     $14,149,338    $ 1,224,837 $9,808,740 $3,115,761    $0

(1) We currently maintain a $10.0 million senior revolving credit facility with the Branch Banking and Trust Company. This revolving credit facility has a three year term expiring December 22, 2009, provides for advances of up to eighty percent (80%) of our eligible accounts receivable and up to forty percent (40%) 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, which was 6.25% as of September 30, 2008, and is secured by all our assets (except rental fleet equipment). The balance of the credit facility at September 30, 2008 was $4,027,002. The revolving credit facility contains certain restrictive and financial covenants. At September 30, 2008, we were in compliance with all restrictive covenants and the entire amount of our credit facility less our outstanding borrowings was available for borrowings. On October 2, 2008 we paid $2,000,000 to decrease the balance of the credit facility to $2,027,002.

On August 2, 2007, we entered into an asset purchase agreement for $1,300,000 funded primarily by a note payable to ILS, 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 recorded a note payable of $1,010,040 with an outstanding balance at September 30, 2008 of $820,076.

On May 14, 2008, we executed a new loan agreement with Branch Banking and Trust Company 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. As of September 30, 2008 we had borrowed $2,897,114 against this loan. 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 September 30, 2008, we were in compliance with all restrictive covenants.

On May 14, 2008, we executed a new loan agreement with Branch Banking and Trust Company in the amount of $6.0 million to finance the purchase of our shredder system and complimentary 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 complimentary 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 continue 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 . . .