Exhibit 99.1
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Appliance Recycling
Centers of America, Inc.
7400 Excelsior Boulevard, Minneapolis MN 55426 (952) 930-9000
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FOR IMMEDIATE RELEASE
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FOR MORE INFORMATION CONTACT:
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Edward R. (Jack) Cameron (952) 930-9000
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Richard G. Cinquina, Equity Market
Partners
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(612) 338-0810
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Appliance
Recycling Centers of America
Returns
to Profitability in Third Quarter
Minneapolis, MN—October 29, 2004—Appliance Recycling Centers of America, Inc.
(OTC BB: 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
(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 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)
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Three months ended
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Nine months ended
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Oct. 2
2004
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Sept. 27
2003
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Oct. 2
2004
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Sept. 27
2003
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Revenues
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Retail
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$
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10,838
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$
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9,189
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$
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31,161
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$
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26,227
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Recycling
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3,199
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2,479
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6,854
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5,872
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Byproduct
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506
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197
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1,120
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514
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Total revenues
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14,543
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11,865
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39,135
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32,613
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Cost of
revenues
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10,041
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8,393
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27,661
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23,931
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Gross profit
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4,502
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3,472
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11,474
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8,682
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Selling,
General & Administrative Expenses
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4,086
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3,223
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11,516
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10,021
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Operating income
(loss)
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416
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249
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(42
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(1,339
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)
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Other
Income (Expense)
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Other income
(expense)
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33
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(4
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22
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(5
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)
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Interest expense
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(187
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)
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(187
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)
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(558
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)
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(547
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)
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Income (loss)
before provision for income taxes
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262
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58
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(578
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)
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(1,891
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)
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Provision
(Benefit of) for Income Taxes
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2
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17
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(64
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(640
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)
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Net
income (loss)
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$
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260
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$
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41
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$
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(514
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$
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(1,251
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Basic
Income (Loss) per Common Share
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$
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0.09
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$
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0.02
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$
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(0.21
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$
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(0.53
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Diluted
Income (Loss) per Common Share
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$
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0.08
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$
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0.01
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$
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(0.21
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$
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(0.53
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Basic
Weighted Average No. of Common Shares Outstanding
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2,986
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2,344
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2,429
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2,341
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Diluted
Weighted Average No. of Common Shares Outstanding
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3,095
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2,897
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2,429
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2,341
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