MINNEAPOLIS, Nov. 3 /PRNewswire-FirstCall/ -- Appliance Recycling
Centers of America, Inc. (OTC:ARCI) (BULLETIN BOARD: ARCI) today
reported revenues of $20,706,000 for the third quarter of 2005
ended October 1, an increase of 42% from $14,543,000 in the
year-earlier period. Net income totaled $47,000 or $0.01 per
diluted share, compared to $260,000 or $0.08 per diluted share in
the third quarter of 2004. For the first nine months of 2005,
revenues increased 45% to $56,757,000 from $39,135,000 in the same
period a year ago. Net income for this period was a breakeven of
$18,000 or $0.00 (rounded) per diluted share, compared to a net
loss of $514,000 or $0.21 per share in the first nine months of
2004. Same-store sales of the nine ApplianceSmart factory outlets
that were open during the third quarters of 2005 and 2004 rose 19%,
while total retail sales from 12 ApplianceSmart outlets increased
52% to $16,513,000 compared to last year's third quarter. A
37,000-square-foot ApplianceSmart factory outlet in San Antonio,
the second store in this market, opened in October 2005. Recycling
revenues increased 17% to $3,757,000 in this year's third quarter
compared to the year-earlier period. The majority of this growth
was generated by the energy conservation program in California
sponsored by Southern California Edison Company, but growing
revenue contributions came from utility-related recycling programs
in Connecticut, the city of Austin, Texas, and the state of
Wisconsin. Edward R. (Jack) Cameron, president and chief executive
officer, commented: "The sales growth of our ApplianceSmart
operation remained exceptionally strong in this year's third
quarter. We believe this sales performance reflects the fundamental
soundness of ApplianceSmart's value proposition, as well as our
ability to target attractive locations for new factory outlets in
both new and existing markets. However, ARCA's profitability was
affected by growth-related expenses generated by the expansion of
our ApplianceSmart network, which grew from nine outlets in the
third quarter of 2004 to 12 at the end of this year's third
quarter. Having demonstrated ApplianceSmart's viability and
effectiveness from the standpoint of top line growth, we now must
improve the operating efficiencies in order to strengthen ARCA's
profitability." Cameron continued: "We remain very confident in
ARCA's prospects. We have made substantial progress in recent years
and believe that ARCA is moving in the right strategic direction.
Over the near-term, the fourth quarter typically marks the onset of
a seasonal slowdown in appliance sales. In addition, the
advertising support provided by our utility partners for their
recycling programs tends to wind down toward the end of each
calendar year." ARCA is currently in the process of submitting a
bid for renewing its multi-year contract for the California
statewide appliance recycling program. This new contract would have
three-year durations starting in January 2006. 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
2005, ApplianceSmart was operating 13 factory outlets: five in the
Minneapolis/St. Paul market; three in the Columbus, Ohio, market;
two in the Atlanta market; two in San Antonio, Texas and one in Los
Angeles. ARCA is also 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 STATEMENT OF OPERATIONS
3rd Quarter 2005 Results (000's omitted except for share amounts)
Three months Nine months ended ended October 1, October 2, October
1, October 2, 2005 2004 2005 2004 Revenues Retail $16,513 $10,838
$47,709 $31,161 Recycling 3,757 3,199 7,973 6,854 Byproduct 436 506
1,075 1,120 Total revenues 20,706 14,543 56,757 39,135 Cost of
Revenues 14,873 10,041 39,667 27,661 Gross profit 5,833 4,502
17,090 11,474 Selling, General & Administrative Expenses 5,529
4,086 16,401 11,516 Operating income (loss) 304 416 689 (42) Other
Income (Expense) Other income 2 33 1 22 Interest expense (259)
(187) (672) (558) Income (loss) before provision for income taxes
47 262 18 (578) Provision for (Benefit of) Income Taxes - 2 - (64)
Net income (loss) $47 $260 $18 $(514) Basic Earnings (Loss) per
Common Share $0.01 $0.09 $0.00 $(0.21) Diluted Earnings (Loss) per
Common Share $0.01 $0.08 $0.00 $(0.21) Basic Weighted Average No.
of Common Shares Outstanding 4,269 2,986 4,242 2,429 Diluted
Weighted Average No. of Common Shares Outstanding 4,388 3,095 4,353
2,429 Appliance Recycling Centers of America, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEET As of October 1, 2005 (000's) October 1,
January 1, 2005 2005 (Unaudited) Assets Current Assets Cash and
cash equivalents $2,692 $4,362 Receivables - net of allowance of
$102,000 3,204 2,034 Inventories, net of reserves of $352,000 and
$385,000 respectively 12,736 10,154 Deferred income taxes 468 468
Other current assets 476 338 Total Current Assets 19,576 17,356
Property and Equipment, at cost Land 2,050 2,050 Building and
Improvements 4,477 4,338 Equipment 6,241 5,928 12,768 12,316 Less
accumulated depreciation 6,594 5,982 Net property and equipment
6,174 6,334 Other assets 327 300 Restricted cash 350 350 Total
Assets $26,427 $24,340 Liabilities and Shareholders' Equity Current
Liabilities Line of credit $6,102 $5,415 Current maturities of long
term obligations 225 615 Accounts payable 5,352 3,889 Accrued
expenses 2,917 2,779 Income taxes payable 58 58 Total Current
Liabilities 14,654 12,756 Minority Interest 12 - Long-Term
Obligations, less current maturities 4,922 5,053 Deferred Income
Tax Liabilities 468 468 Total Liabilities 20,056 18,277
Shareholders' Equity Common stock, no par value; authorized
10,000,000 shares; issued and outstanding 4,319,000 and 4,136,000
shares respectively 14,840 14,549 Accumulated Deficit (8,469)
(8,486) Total Shareholders' Equity 6,371 6,063 Total Liabilities
and Shareholders' Equity $26,427 $24,340 DATASOURCE: Appliance
Recycling Centers of America, Inc. CONTACT: Edward R. (Jack)
Cameron, CEO of Appliance Recycling Centers of America,
+1-952-930-9000, or Richard G. Cinquina of Equity Market Partners,
+1-904-261-2210 Web site: http://www.appliancesmart.com/
http://www.arcainc.com/
Copyright
