Quarterly report pursuant to Section 13 or 15(d)

6. Variable Interest Entity

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6. Variable Interest Entity
 9 Months Ended
Oct. 01, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Variable Interest Entity

The financial position and results of operations of AAP are consolidated in our financial statements based on our conclusion that AAP is a variable interest entity due to our contribution in excess of 50% of the total equity, subordinated debt and other forms of financial support. We have a controlling financial interest in AAP and have provided substantial financial support to fund the operations of AAP since its inception. The financial position and results of operations for AAP are reported in our recycling segment.

 

The following table summarizes the assets and liabilities of AAP as of October 1, 2016, and January 2, 2016:

 

    October 1, 2016     January 2, 2016  
Assets                
Current assets   $ 522     $ 696  
Property and equipment, net     7,511       8,077  
Other assets     83       83  
Total Assets   $ 8,116     $ 8,856  
Liabilities                
Accounts payable (a)   $ 1,496     $ 1,872  
Accrued expenses     500       399  
Current maturities of long-term debt obligations     705       946  
Long-term debt obligations, net of current maturities     3,337       3,439  
Other liabilities (b)     1,126       759  
Total Liabilities   $ 7,164     $ 7,415  

 

(a) As of October 1, 2016, AAP has $431 in advances payable to 4301 included in accounts payable.
(b) Other liabilities represent loans and advances between ARCA and AAP that are eliminated in consolidation.

 

In April 2016, an officer of the Company loaned $75 to AAP through the issuance of an 8% promissory note. In August 2016, the note was repaid with the collection of carbon offset program revenues.

 

The following table summarizes the operating results of AAP for the three months and nine months ended July 2, 2016, and October 3, 2015:

 

    Three Months Ended     Nine Months Ended  
    October 1, 2016     October 3, 2015     October 1, 2016     October 3, 2015  
Revenues   $ 2,076     $ 1,577     $ 5,557     $ 5,455  
Gross profit     492       (234 )     967       69  
Operating income (loss)     79       (684 )     (285 )     (1,366 )
Net income (loss)     24       (748 )     (490 )     (1,548 )