Date: May 4, 2006
Source: PR Newswire
Appliance Recycling Centers of America, Inc. (Nasdaq: ARCI) today reported sales of $17,916,000 for the first quarter of 2006 ended April 1, an increase of 6% from $16,909,000 in the year-earlier period. ARCA's net loss for this period came to $678,000 or $0.16 per share, compared to the net loss of $433,000 or $0.10 per share in the first quarter of 2005.
Same-store sales of the 11 ApplianceSmart factory outlets that were open during the complete first quarters of 2006 and 2005 increased 4%, while total retail sales rose 6% to $15,837,000. ApplianceSmart's third factory outlet in the Atlanta market will open in this year's second quarter, bringing the total number of stores to 14 nationally.
First quarter recycling revenues of $1,763,000 were substantially unchanged from the level in the year-earlier period. Utilities generally increase their advertising support in the second quarter, which is expected to have a positive impact on recycling volumes. ARCA has submitted a proposal for an extension of the appliance recycling program sponsored by Southern California Edison Company 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 2006, pending approval of ARCA's proposal by California's Public Utilities Commission. ARCA also has submitted a proposal for renewing its appliance recycling program with San Diego Gas & Electric.
Edward R. (Jack) Cameron, president and chief executive officer, commented: "ARCA's results were affected by seasonal conditions that typically cause the first quarter to be ApplianceSmart's weakest period of the year. In addition, we temporarily delayed planned newspaper advertising in our large Minnesota market until we negotiated more favorable advertising rates. We also believe high gasoline prices and rising interest rates could have affected the discretionary purchasing decisions of our value-conscious customer base. The second and third quarters are typically ApplianceSmart's seasonally strongest periods, and we entered the second quarter with increased advertising support to coincide with this anticipated strengthening. While the impact of national economic conditions on our customers remains a concern, we believe the second quarter should be a stronger period for our retail operation."
About ARCA
Through its ApplianceSmart ( 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 May 2006, 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 one of the nation's largest recyclers of major household appliances for the energy conservation programs of electric utilities.
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