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.

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

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.

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           2008
Statements 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                                                                         5.2%           7.2%
expenses.............................................................

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.

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      Total

 Waste equipment             $  100,487   $      -     $      -    $      -    $  100,487
 machinery
 Stainless steel alloys       3,247,990                                         3,247,990
 Ferrous materials            1,352,062     358,826      163,852     300,009    2,174,749
 Non-ferrous materials          818,242      99,920       65,906     549,881    1,533,949
 Other                           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      Total

 Waste equipment machinery   $   95,675   $       -    $      -    $     -    $   95,675
 Ferrous Materials            1,364,091      376,684     326,874     94,500    2,162,149
 Non-ferrous materials          990,843      217,591     294,992    529,728    2,033,154
 Other                           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.

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     1-3 years   3-5 years     More
                                       than 1 year                          than 5
                                                                            years
Long-Term Debt Obligations $23,244,076 $10,013,185 $6,127,723 $7,103,168      $0
Capital Lease Obligations
(1)                             86,490      78,732      7,758           0      0
Operating Lease
Obligations (2)              2,419,817     668,978  1,273,839     477,000      0
Total                      $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.

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.