Appliance Recycling Centers Of America Reports Fourth Quarter And Full Year 2009 Results
MINNEAPOLIS, March 1 /PRNewswire-FirstCall/ -- Appliance Recycling Centers of America, Inc. (Nasdaq: ARCI) today reported operating results for the fourth quarter and fiscal year ended January 2, 2010.
Highlights for the fiscal year include:
- Awarded six new recycling contracts servicing utilities in Colorado, Maryland, Minnesota, New Mexico, South Carolina and Washington.
- Reached the milestone of recycling 10,000 refrigerators and freezers for Ameren Illinois Utilities (AmerenCIPS, AmerenCILCO, AmerenIP) Act On Energy® Recycling Program.
- Comparable retail revenues for the fourth quarter increased 2.9%.
- Completed a sale-leaseback of the Company's St. Louis Park, Minnesota facility, which generated net proceeds of $2.0 million in cash used to pay down existing debt on its line of credit.
Fourth Quarter Financial Overview
Total revenues for the fourth quarter of 2009 decreased 9.5% to $23.7 million from $26.2 million in the fourth quarter of 2008. ARCA reported a fourth quarter 2009 operating loss of $1.2 million compared to an operating loss of $0.3 million during the same period of 2008. Fourth quarter 2009 comparable retail revenues from the ApplianceSmart Factory Outlets open for the past twelve months decreased 6.0%, and total retail revenues decreased 4.7% to $16.8 million from $17.6 million during the same period of 2008. In fiscal 2009, the fourth quarter included 13 weeks compared to 14 weeks of the comparable period in 2008. Normalizing for the additional week in fiscal 2008, comparable retail revenues increased 2.9%. The normalized increase in comparable store revenues was due primarily to higher levels of customer traffic. Recycling revenues decreased 23.3% to $5.9 million in the fourth quarter of 2009 compared to revenues of $7.6 million in the same period of 2008. The decrease in recycling revenues compared to the fourth quarter of 2008 was primarily the result of a planned volume reduction for one contract in California. Byproduct revenues increased 13.8% to $1.1 million in the fourth quarter of 2009 compared to revenues of $0.9 million in the fourth quarter of 2008. The increase in byproduct revenues was primarily the result of higher scrap metal prices compared to the fourth quarter of 2008.Overall gross profit as a percentage of total revenues declined to 25.2% for the fourth quarter of 2009 compared to 29.6% for the fourth quarter of 2008. Gross profit for the retail segment was 20.8% in the fourth quarter of 2009 compared to 29.0% in the same quarter of 2008. The year-over-year decline was related primarily to retail price compression. Gross profit for the recycling segment was 36.2% for the fourth quarter of 2009 compared to 30.7% for the same quarter of 2008, primarily as a result of tightening cost controls at the Company's existing recycling facilities, improving revenues and profitability for some of the recycling contracts that existed in both 2008 and 2009, and improving the economic model for some of the new recycling contracts.
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