Appliance Recycling Centers of America Returns to Profitability in Third Quarter
October 29 2004 - 6:46PM
PR Newswire (US)
Appliance Recycling Centers of America Returns to Profitability in
Third Quarter MINNEAPOLIS, Oct. 29 /PRNewswire-FirstCall/ --
Appliance Recycling Centers of America, Inc. (OTC:ARCI) (BULLETIN
BOARD: ARCI) today reported revenues of $14,543,000 in the third
quarter of 2004 ended October 2, an increase of 23% from
$11,865,000 in the year-earlier period. ARCA reported net income of
$260,000 or $0.08 per diluted share, a significant improvement from
earnings of $41,000 or $0.01 per diluted share in the third quarter
of 2003. For the first nine months of 2004, revenues totaled
$39,135,000, up 20% from $32,613,000 in the comparable period of
2003. ARCA's net loss for this period came to $514,000 or $0.21 per
share, down significantly from the net loss of $1,251,000 or $0.53
per share in the first nine months of 2003. Same-store sales of the
eight ApplianceSmart factory outlets that were open during the
complete third quarters of 2004 and 2003 rose 9%. Total retail
sales of all nine ApplianceSmart outlets rose 18% to $10,838,000 on
a quarter-over-quarter basis, which included a strong contribution
from the new factory outlet serving the Atlanta market. ARCA
recently announced that three new ApplianceSmart outlet stores will
be opened during the fourth quarter: in St. Paul, Minnesota (the
fifth in the Minneapolis/St. Paul market), in Atlanta (a
combination factory outlet and distribution center, the second
facility in this market), and in San Antonio, Texas (a new market
for ApplianceSmart). This expansion will increase the number of
ApplianceSmart outlets nationally to 12. Recycling revenues came to
$3,199,000 in the third quarter, an increase of 29% from the
year-earlier period. This strong growth reflected the positive
impact of consistent and effective advertising in support of
California's Statewide Residential Appliance Recycling Program.
Third quarter recycling revenues also included a contribution from
a new residential energy conservation program in Connecticut,
jointly sponsored by The United Illuminating Company and The
Connecticut Light & Power Company. In addition, initial
revenues were recognized from a one-year contract with San Diego
Gas & Electric. Edward R. (Jack) Cameron, president and chief
executive officer, commented: "Reflecting ongoing initiatives to
strengthen all aspects of our operations, we have reported steadily
improving results during the past year, culminating in our return
to a solid level of profitability in the third quarter. We are also
very encouraged by our ability to invest in our ApplianceSmart
operation and thus open three new superstores in this year's fourth
quarter. The majority of the expenses associated with these store
openings will be incurred during this period, which will affect
ARCA's fourth quarter results. As a result of this expansion, we
will enter 2005 with 12 ApplianceSmart outlet stores. Equally
encouraging, we expect to experience no interruption in first
quarter recycling volumes due to our two-year contract for handling
California's 2004-2005 statewide energy conservation program. Given
these factors, we are optimistic about ARCA's prospects as we look
ahead to 2005." About ARCA Through its ApplianceSmart (
http://www.appliancesmart.com/ ) operation, ARCA is one of the
nation's leading retailers of special-buy household appliances,
primarily those manufactured by Maytag, GE, Frigidaire and
Whirlpool. These special-buy appliances, which include close-outs,
factory overruns and scratch-and-dent units, typically are not
integrated into the manufacturer's normal distribution channel.
ApplianceSmart sells these virtually new appliances at a discount
to full retail, offers a 100% money- back guarantee and provides
warranties on parts and labor. As of October 2004, ApplianceSmart
was operating nine factory outlets: four in the Minneapolis/St.
Paul market; three in the Columbus, Ohio, market; one in the
Atlanta market; and one in Los Angeles. ARCA is also one of the
nation's largest recyclers of major household appliances for the
energy conservation programs of electric utilities. Statements
about ARCA's outlook are forward-looking and involve risks and
uncertainties, including but not limited to: the strength of
recycling programs, the growth of appliance retail sales, the speed
at which individual retail stores reach profitability, and other
factors discussed in the Company's filings with the Securities and
Exchange Commission. Visit our web site at http://www.arcainc.com/
. Appliance Recycling Centers of America, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) 3rd Quarter 2004
Results (000's omitted except for per-share amounts) Three months
ended Nine months ended Oct. 2 Sept. 27 Oct. 2 Sept. 27 2004 2003
2004 2003 Revenues Retail $10,838 $9,189 $31,161 $26,227 Recycling
3,199 2,479 6,854 5,872 Byproduct 506 197 1,120 514 Total revenues
14,543 11,865 39,135 32,613 Cost of revenues 10,041 8,393 27,661
23,931 Gross profit 4,502 3,472 11,474 8,682 Selling, General &
Administrative Expenses 4,086 3,223 11,516 10,021 Operating income
(loss) 416 249 (42) (1,339) Other Income (Expense) Other income
(expense) 33 (4) 22 (5) Interest expense (187) (187) (558) (547)
Income (loss) before provision for income taxes 262 58 (578)
(1,891) Provision (Benefit of) for Income Taxes 2 17 (64) (640) Net
income (loss) $260 $41 $(514) $(1,251) Basic Income (Loss) per
Common Share $0.09 $0.02 $(0.21) $(0.53) Diluted Income (Loss) per
Common Share $0.08 $0.01 $(0.21) $(0.53) Basic Weighted Average No.
of Common Shares Outstanding 2,986 2,344 2,429 2,341 Diluted
Weighted Average No. of Common Shares Outstanding 3,095 2,897 2,429
2,341 DATASOURCE: Appliance Recycling Centers of America, Inc.
CONTACT: Edward R. (Jack) Cameron, of Appliance Recycling Centers
of America, +1-952-930-9000; or Richard G. Cinquina of Equity
Market Partners, +1-612-338-0810 Web site:
http://www.appliancesmart.com/
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