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ARCA Reports Strongly Improved Sales and Earnings for Fourth Quarter and Full-Year 1999
MINNEAPOLIS, Feb. 29 /PRNewswire/ -- Appliance Recycling Centers of America, Inc. (OTC Bulletin Board: ARCI - news) today reported net income of $121,000 or $.04 per diluted share for the fourth quarter of 1999 ended January 1, 2000, a significant turnaround from the net loss of $1,370,000 or $1.08 per diluted share in the year-earlier period. Revenues increased 28% to $4,023,000, from $3,133,000 in the fourth quarter of 1998.
For full-year 1999, earnings came to $505,000 or $.22 per diluted share, compared to the net loss of $3,056,000 or $2.55 per diluted share in 1998, which included a $573,000 write-off related primarily to the curtailment of the appliance shredding operation at the Company's Minneapolis center. Revenues rose 14% to $15,582,000 in 1999, from $13,612,000 in 1998. Earnings per share for the fourth quarter and full-year 1999 were affected by a significant increase in the Company's shares outstanding, reflecting the impact of a private placement of common stock in February 1999. For 1999, weighted average common shares outstanding increased to 2,142,000, up 79% from 1,200,000 in 1998.
EBITDA (earnings before interest, taxes, depreciation and amortization) came to $1,471,000 in 1999, a substantial improvement from negative EBITDA of $2,040,000 in 1998.
In addition to turning cash flow positive in 1999, ARCA also materially strengthened its overall financial condition during the past year. The Company ended 1999 with working capital of $545,000, compared to the working capital deficit of $471,000 at year-end 1998. In addition, shareholders' equity rose to $1,809,000 at December 31, 1999, from $816,000 at the end of 1998.
Edward R. (Jack) Cameron, president and chief executive officer, commented: ``Driven by the growing effectiveness of our ApplianceSmart retailing strategy and a strong contribution from recycling operations for electric utilities in California, 1999 was an extremely successful year for ARCA by virtually any standard. Our positive results indicate that our appliance retail and recycling strategy is working as planned and starting to generate the intended results. Our progress makes us optimistic about our prospects for continued revenue and earnings growth in 2000.'
Same-store ApplianceSmart sales increased 57% in 1999 and rose every quarter versus the year-earlier levels. Despite operating fewer retail outlets in 1999, total retail sales rose 2% during the past year, reflecting the positive impact of ARCA's strategy that calls for serving the Company's markets with fewer but larger retail outlets. This has also resulted in reduced overhead and strengthened operating efficiencies.
Reflecting strengthened advertising campaigns during the past year, the Company's refrigerator recycling program for Southern California Edison Company also made a solid contribution to 1999 profitability. The year 2000 program with Edison has been approved at the same level as 1999 and is now underway.
In December 1999, the Company opened its web site at appliancesmart.com . This site is designed to drive retail traffic to ApplianceSmart outlets. The Company said it is encouraged by the growing volume of ``hits' on its site.
The Company said it currently sees 2000 shaping up as a year of improved revenues and earnings. Retail sales have remained strong thus far in the first quarter of 2000, which is typically the seasonally weakest period of the year for appliance sales. Recycling revenues generated by energy conservation programs for electric utilities are also meeting planned levels.
ARCA's ApplianceSmart outlet stores are one of the nation's largest retailers of factory over-runs and closeout appliances. ARCA is also a leading provider of reverse logistics, energy efficiency and appliance recycling services for the appliance industry and utility companies.
Statements about ARCA's outlook are forward-looking and involve risks and uncertainties, including but not limited to: the growth of appliance retail sales, the speed at which individual retail stores reach profitability, the strength of recycling programs, and other factors discussed in the Company's filings with the Securities and Exchange Commission.
Appliance Recycling Centers of America, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
1999 RESULTS
(000's)
Three months ended Twelve months ended
Jan 1 Jan 2 Jan 1 Jan 2
2000 1999 2000 1999
Revenues
Retail $1,853 $2,197 $7,956 $7,835
Recycling 2,170 936 7,626 5,777
Total revenues $4,023 $3,133 $15,582 $13,612
Cost of revenues 2,285 2,686 8,916 9,631
Gross profit $1,738 $447 $6,666 $3,981
Selling, General &
Administrative Expenses 1,460 1,585 5,527 6,152
Loss on impaired assets 0 55 0 573
Operating income (loss) $278 ($1,193) $1,139 ($2,744)
Other Income (Expense)
Other income 27 41 144 319
Interest income 2 1 2 1
Interest expense (186) (189) (780) (601)
Income (loss) before
provision for
income taxes $121 ($1,340) $505 ($3,025)
Provision for (benefit of)
income taxes 0 30 0 31
Net income (loss) $121 ($1,370) $505 ($3,056)
Basic Income (Loss)
per Common Share 0.05 (1.08) 0.24 (2.55)
Diluted Income (Loss)
per Common Share 0.04 (1.08) 0.22 (2.55)
Weighted average no. of
common shares outstanding
Basic 2,287 1,237 2,142 1,200
Diluted 2,681 1,237 2,274 1,200 |
