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Non-Tech : Don't abuse it, reuse it! ARCI makes the big comeback. -- Ignore unavailable to you. Want to Upgrade?

To: Jim Mac who wrote (29)	6/23/1999 9:37:00 PM
From: Jim Mac	Read Replies (1) \| Respond to of 60

Okay, things look good. L.A. Dept of Water and Power contract started in June Q, Edison contract started in April, and retail sales were up 25% even with a 33% reduction in stores, and same store sales for 7 of 8 stores open in 98Q1 were up over 90%...Wow. Q1 gross margin was 33% vs 24%?, ON LOWER REVENUES. SGA way down to $1.2M per Q. So, since retail is really kicking ass with those Whirlpool scratch and dent units, and recycling should return to $1.5M+ per Q for a while, we should be profitable, and generate some cash consistently going forward. My Q2 prediction (1000's): Revenues: $3,500 Gr Profit:$1,400 40% margin SG&A: ($1,200) Op Income:$200 Int Exp: ($200) Net Inc: ---- Operating cash flow (EBITDA): $100+ If ARCI does $4M in revs: Revenues: $4,000 Gr Profit:$1,600+ 40%+ margin SG&A: ($1,200) Op Income: $400+ Int Exp: ($200) Net Inc: $200+ Operating cash flow (EBITDA) $300+ EPS $0.07+ Diluted Shares 3M Retail is now major revenue source, and is smoothing out overall revenue growth even as recycling continues to be volatile. In a few more quarters, retail will likely be approaching $2.5M per quarter, maybe $3M next year, and recycling will no longer screw earnings as much from Q to Q. With $4 per share in revenues, and only 3M diluted shares outstanding, a measly $300,000 in Q profits in near future will put annualized EPS at $0.40...so shares might return to $4 within a year, closer to their price a year ago, when outlook looked weaker than now. ...so you might want to accumulate ARCI near $0.75. That's a BK price, but there's no way ARCI is in trouble now. They can continue servicing their debt, and as earnings/cash flow come around in a quarter or two, and stock rises within 12 months, they can renegotiate their loans, and later do a private placement with modest dilution. This looks like LPAC under $1 a year ago. BK price. Look at it now: $6, heading to $10. GO ARCI!!!