ARCA reports first quarter loss

Minneapolis-based Appliance Recycling Centers of America Inc. (ARCA) has reported a net loss for its 2015 first quarter, which ended April 4.

ARCA’s revenue for the first quarter of 2015 was $27.5 million, down 16.8 percent compared with the same period in 2014. It cites “decreased recycling division appliance replacement sales and lower carbon offset revenue” as factors.

The company’s net loss for the first quarter of 2015 was $1.7 million, or 29 cents per diluted share. That compares with earnings of $700,000, or 12 cents per diluted share, in the first quarter of 2014.

ARCA also cites “delays in the deliveries under one of our largest appliance replacement programs and declining byproduct revenue resulting from the significant drop in steel and other nonferrous metal selling prices in the markets [in which] we operate” as additional contributing factors in its first quarter summary.

“We reported declines in our financial results for the first quarter, as result of delays that were outside of our control in our appliance replacement program deliveries in fiscal 2015 and the impact that the strong U.S. dollar has had on the price of steel and other nonferrous metals that we sell,” says Edward R. (Jack) Cameron, president and CEO of ARCA.

Cameron adds, “Although the recovery of scrap steel and nonferrous metal prices appears to be a slow one, we are hopeful that the markets will return to levels at which we are profitable.  Further, the delays encountered in our largest appliance replacement program have been resolved and we are now returning to higher delivery levels. Finally, we received approximately $600,000 in carbon offset revenue in the second quarter of 2015 and plan to participate in further carbon offset programs with the refrigerants that we have accumulated for responsible destruction.”

ARCA's byproduct (or scrap) revenue decreased from $4.8 million in the first quarter of 2014 to $2.6 million in the first fiscal quarter of 2015. The company says its scrap steel selling prices have fallen as much as $185 per ton (or 44 percent) compared with the prior year's first quarter peak.