MINNEAPOLIS, March 20 /PRNewswire-FirstCall/ -- Appliance Recycling
Centers of America, Inc. (NASDAQ:ARCI) today reported revenues of
$74,893,000 for the year ended December 31, 2005, an increase of
42% from $52,830,000 in 2004. ARCA's net loss for the year declined
to $933,000 or $0.22 per diluted share, from $1,314,000 or $0.48
per diluted share in the prior year. For the fourth quarter of
2005, revenues rose 32% to $18,136,000, from $13,695,000 in the
fourth quarter of 2004. ARCA's net loss for the fourth quarter of
2005 was $951,000 or $0.22 per diluted share, compared to the net
loss of $800,000 or $0.27 per diluted share in the fourth quarter
of 2004. All per-share amounts reflect the greater number of
weighted average number of shares outstanding in 2005 due to the
private placement of ARCA common stock in December 2004. As
previously reported, ARCA commenced trading on the Nasdaq Capital
Market on February 22. Same-store sales of the nine ApplianceSmart
factory outlets that were open during full years 2005 and 2004
increased 16%, while total retail sales of all 13 ApplianceSmart
outlets rose 49% in 2005 to $62,365,000. Same-store sales of the
nine ApplianceSmart outlets that were open during the fourth
quarters of 2005 and 2004 rose 11%, with total retail sales in this
year's fourth quarter up 37% to $14,656,000. Total retail sales for
the fourth quarter and full year include the impact of
ApplianceSmart's second factory outlet in San Antonio, Texas, that
opened in October 2005. ApplianceSmart will open its third factory
outlet in the Atlanta market early in this year's second quarter.
Recycling revenues increased 16% in 2005 to $10,937,000 and rose
16% in the fourth quarter to $2,964,000. The majority of this
growth was generated by the energy conservation program that ARCA
handles for Southern California Edison Company. Revenue
contributions were also generated by utility-related recycling
programs in Connecticut, Wisconsin and Austin, Texas. ARCA has
submitted a proposal for the continuation of its Edison-sponsored
California appliance recycling program for the years 2006 through
2008. This proposal covers substantially the same Southern
California territory as the 2004-2005 program, which has been
rolled over into this year's first quarter, pending approval of
ARCA's proposal by the California Public Utilities Commission. In
addition, ARCA has submitted a proposal for renewing its appliance
recycling program with San Diego Gas & Electric. Existing
programs with the Los Angeles Department of Water and Power as well
as with electric utilities in Connecticut, Wisconsin and Austin,
Texas, will continue in 2006. Edward R. (Jack) Cameron, president
and chief executive officer, commented: "We are encouraged to be
reporting a reduced net loss for 2005, reflecting strong
ApplianceSmart sales growth and another solid contribution from our
appliance recycling operation. The progress that we have made with
our operations over the past few years has enabled us to be listed
on the Nasdaq Capital Market, a development that is expected to
enhance trading liquidity and raise ARCA's visibility and
credibility among investors. Included in our fourth quarter and
year-to-date loss for 2005 are legal fees for our lawsuit against
JACO of approximately $200,000 and $317,000, respectively." He
continued: "ARCA has clearly demonstrated its ability to generate
strong top-line growth. However, our profitability has been
affected by the ramifications that come with rapid growth. We are
not only entering into new markets and opening additional outlets
in existing markets, we are also directing significant resources
toward improved operating systems and associated personnel to
support our expansion. As previously reported, we entered into a
purchase agreement for the sale of our corporate headquarters
facility for approximately $6 million. To continue to grow and gain
efficiencies in our operations in this market, we have determined
that we need to move to facilities that will better accommodate the
expansion of our business. Our goal of dropping more of every sales
dollar to our bottom line is our top priority going forward. We are
committed to making measurable progress toward this objective
during the coming year." 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 March 2006, ApplianceSmart is
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 recycler 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 speed at
which individual ApplianceSmart outlets reach profitability, the
growth of appliance retail sales, the strength of energy
conservation recycling programs, and other factors discussed in the
Company's filings with the Securities and Exchange Commission.
Visit our web sites at http://www.arcainc.com/ and
http://www.appliancesmart.com/ . Appliance Recycling Centers of
America, Inc. and Subsidiaries CONSOLIDATED STATEMENT OF OPERATIONS
4th Quarter 2005 Results (000's omitted except for per-share
amounts) Three months Twelve months ended ended Dec. 31, Jan. 1,
Dec. 31, Jan. 1, 2005 2005 2005 2005 Revenues Retail $14,656
$10,686 $62,365 $41,847 Recycling 2,964 2,560 10,937 9,414
Byproduct 516 449 1,591 1,569 Total revenues 18,136 13,695 74,893
52,830 Cost of Revenues 12,739 9,626 52,406 37,287 Gross profit
5,397 4,069 22,487 15,543 Selling, General & Administrative
Expenses 6,248 5,130 22,637 16,646 Operating loss (851) (1,061)
(150) (1,103) Other Income (Expense) Other income (expense) 67 (2)
68 20 Interest income 32 - 32 - Interest expense (211) (219) (883)
(777) Minority interest 12 - - - Loss before provision for income
taxes (951) (1,282) (933) (1,860) Benefit of Income Taxes - (482) -
(546) Net loss $(951) $(800) $(933) $(1,314) Basic Loss per Common
Share $(0.22) $(0.27) $(0.22) $(0.48) Diluted Loss per Common Share
$(0.22) $(0.27) $(0.22) $(0.48) Basic Weighted Average No. of
Common Shares Outstanding 4,269 2,999 4,261 2,722 Diluted Weighted
Average No. of Common Shares Outstanding 4,269 2,999 4,261 2,722
Appliance Recycling Centers of America, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEET (000's) December 31, January 1, 2005
2005 Assets Current Assets Cash and cash equivalents $2,095 $4,362
Receivables, net of allowance of $252,000 and $102,000,
respectively 2,896 2,034 Inventories, net of reserves of $379,000
and $385,000, respectively 11,900 10,154 Deferred income taxes 464
468 Other current assets 449 338 Total Current Assets 17,804 17,356
Property and Equipment, at cost Land 2,050 2,050 Building and
improvements 4,501 4,338 Equipment 6,299 5,928 12,850 12,316 Less
accumulated depreciation 6,798 5,982 Net property and equipment
6,052 6,334 Other assets 356 300 Restricted cash 350 350 Deferred
income taxes 30 - Total Assets $24,592 $24,340 Liabilities and
Shareholders' Equity Current Liabilities Line of credit $6,125
$5,415 Current maturities of long-term obligations 262 615 Accounts
payable 3,868 3,889 Accrued expenses 3,541 2,779 Income taxes
payable 58 58 Deferred income tax liabilities 71 - Total Current
Liabilities 13,925 12,756 Long-Term Obligations, less current
maturities 4,823 5,053 Deferred Income Tax Liabilities 423 468
Total Liabilities 19,171 18,277 Shareholders' Equity Common stock,
no par value; authorized 10,000,000 shares; issued and outstanding
4,320,000 and 4,136,000 shares respectively 14,840 14,549
Accumulated deficit (9,419) (8,486) Total shareholders' equity
5,421 6,063 Total Liabilities and Shareholders' Equity $24,592
$24,340 DATASOURCE: Appliance Recycling Centers of America, Inc.
CONTACT: Edward R. (Jack) Cameron (CEO) or Linda A. Koenig (CFO),
+1-952-930-9000, both of Appliance Recycling Centers of America, or
Richard G. Cinquina of Equity Market Partners, +1-904-415-1415 Web
site: http://www.appliancesmart.com/ http://www.arcainc.com/
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