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
information contact:
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Edward
R. (Jack) Cameron, CEO
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Peter
Hausback, CFO
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952/930-9000
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Richard
G. Cinquina
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Equity
Market Partners
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904-415-1415
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Appliance Recycling Centers of America Reports Record Fourth Quarter
And Full-Year 2007 Operating Results
Minneapolis,
MN—March 13, 2008—Appliance Recycling Centers of America, Inc.
(Nasdaq: ARCI) today reported results for the fourth quarter and full year
ended December 29, 2007.
Financial
highlights for the fourth quarter of 2007 versus the year-earlier period
include:
· Total revenues increased 55% to $30.9
million.
· ApplianceSmart same-store sales increased 9%.
· Recycling revenues quadrupled, rising to
$10.9 million.
· Net income was $771,000 or $.17 per share,
compared to the net loss of $291,000 or ($0.07) per share in the prior year’s
quarter.
Fourth
Quarter Financial Review
Total
revenue for the fourth quarter of 2007 increased 55% to $30,881,000 from
$19,930,000 in the fourth quarter of 2006. ARCA also reported net income of
$771,000 or $0.17 per share for this period, a significant improvement from the
net loss of $291,000 or ($0.07) per share in the fourth quarter of 2006.
Same-store
sales of the 13 ApplianceSmart factory outlets that were open during the
complete fourth quarters of 2007 and 2006 increased a strong 9%, while total
retail sales rose 13% to $18,922,000 for the fourth quarter of 2007, reflecting
the positive impact of newer factory outlets.
ApplianceSmart
closed its small factory outlet in Compton, California, in October to
enable this facility to better focus on its appliance recycling operation. In
December, ApplianceSmart’s fourth factory outlet was opened in the Columbus,
Ohio, market, which became the fifteenth store nationally.
Fourth
quarter recycling revenues increased to $10,906,000 from $2,629,000 in the
comparable period of 2006. This strong growth was generated by significant new
appliance recycling programs in Los Angeles and Ontario, Canada, in addition to
existing recycling programs in California, Wisconsin and Texas. ARCA believes
the heightening interest in its appliance recycling capabilities reflects the
growing commitment of North American electric utilities and government agencies
to conserve energy and reduce emissions of greenhouse gases.
Full-Year
2007 Financial Results
For
full-year 2007, revenues crossed the $100 million mark for the first time in
ARCA’s history, rising 30% to $100,765,000 from $77,790,000 in 2006. ARCA’s
earnings also hit an all-time high of $2,539,000 or $0.57 per diluted share,
compared to the net loss of $1,409,000 or ($0.33) per share in 2006.
Edward
R. (Jack) Cameron, President and Chief Executive Officer, commented: “Generated
by the outstanding performances of our ApplianceSmart and appliance recycling
operations, ARCA’s 2007 results were the strongest in our history.
ApplianceSmart’s business is less dependent on new construction than most
appliance retailers, since we focus primarily on the replacement appliance and
remodeling markets. This strategy has moderated the impact of the ongoing
slowdown in the nation’s residential construction sector. We believe
ApplianceSmart’s fourth quarter and full year performances also reflect the
effectiveness of its basic operating strategy, aimed at meeting the needs of
value-conscious consumers. This becomes an even more tangible benefit in today’s
challenging economic environment.”
He
continued: “During the fourth quarter, ARCA’s recycling operation continued to
benefit from two significant programs that were awarded earlier in the year.
Under the previously announced expansion of our recycling contract with the Southern
California Public Power Authority to include the Los Angeles Department of
Water and Power, we are replacing and recycling 50,000 old, inefficient
refrigerators owned by low-income residents in Los Angeles. Also as previously announced, ARCA’s Canadian
subsidiary, ARCA Canada Inc., received a three-year appliance recycling
contract in June with the Ontario Power Authority to recycle older but
working refrigerators, freezers and room air conditioners. Our other recycling
operations in California, Wisconsin and Texas performed at planned levels in
the fourth quarter and full year.”
As
recently announced, Peter Hausback was named to the newly created position of
Executive Vice President and Chief Financial Officer. He will oversee finance,
investor relations, human resources, information systems and strategic
planning. In addition, Hausback will manage ARCA’s utilities operation.
Cameron commented: “Peter Hausback brings to
ARCA 25 years of experience in finance, operations and corporate
development with various companies in the retail industry, most recently as
chief financial officer of Granite City Food & Brewery. The addition
of Peter significantly strengthens our executive team, further enhancing ARCA’s
prospects for continued success. Supported by Peter’s capabilities and
experience, I will be able to focus more of my time on strategic initiatives
and development of new business.”
About ARCA
ARCA is one of the nation’s largest recyclers of major household appliances for
the energy conservation programs of electric utilities. Through its
ApplianceSmart operation, ARCA also 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 2008,
ApplianceSmart was operating 15 factory outlets: five in the Minneapolis/St.
Paul market; four in the Columbus, Ohio, market; four in the Atlanta market;
and two in San Antonio, Texas.
This
press release contains statements that are forward-looking statements as
defined within the Private Securities Litigation Reform Act of 1995, including
statements regarding ARCA’s future success. These forward-looking statements
are subject to risks and uncertainties that could cause actual results to
differ materially from the statements made, including the risks associated with
general economic conditions, competition in the retail and recycling industries
and regulatory risks. Other factors that could cause operating and financial
results to differ are described in ARCA’s periodic reports filed with the
Securities and Exchange Commission. Other risks may be detailed from time to
time in reports to be filed with the SEC.
Appliance
Recycling Centers of America, Inc. and Subsidiaries
CONSOLIDATED
STATEMENT OF OPERATIONS
4th
Quarter and Year-to-date 2007 Results
(000’s
omitted except for share amounts)
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Three months
ended
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Year
ended
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December 29
2007
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December 30
2006
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December 29
2007
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December 30
2006
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Revenues
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Retail
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$
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18,922
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$
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16,718
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$
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72,915
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$
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65,504
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Recycling
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10,906
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2,629
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25,188
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10,314
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Byproduct
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1,053
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583
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2,662
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1,972
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Total revenues
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$
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30,881
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$
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19,930
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$
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100,765
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$
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77,790
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Cost of Revenues
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21,945
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14,072
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67,996
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54,315
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Gross profit
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$
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8,936
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$
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5,858
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$
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32,769
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$
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23,475
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Selling, General & Administrative
Expenses
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7,594
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6,617
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28,563
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24,586
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Operating income
(loss)
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$
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1,342
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$
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(759
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$
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4,206
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$
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(1,111
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Other Income (Expense)
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Other income
(expense)
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(22
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751
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(54
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758
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Interest Income
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3
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23
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21
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23
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Interest expense
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(454
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(306
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(1,471
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(1,079
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Income (loss)
before provision for income taxes
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$
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869
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(291
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$
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2,702
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$
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(1,409
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Provision for Income Taxes
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98
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163
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Net income
(loss)
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$
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771
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$
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(291
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$
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2,539
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$
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(1,409
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Basic Income (Loss) per Common Share
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$
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0.17
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$
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(0.07
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$
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0.58
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$
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(0.33
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Diluted Income (Loss) per Common Share
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$
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0.17
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$
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(0.07
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$
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0.57
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$
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(0.33
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Basic
Weighted Average No. of Common Shares Outstanding
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4,495
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4,341
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4,400
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4,335
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Diluted
Weighted Average No. of Common Shares Outstanding
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4,585
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4,341
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4,475
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4,335
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