Appliance Recycling Centers of America Reports Strong 2Q
Aug 16, 2011
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Appliance Recycling Centers of America, Inc. (Minneapolis, MN, U.S.) reported second quarter 2011 operating income was up 112% to $2.3 million from $1.1 million in the second quarter of 2010. The increase in operating income came mostly from higher byproduct revenues, higher recycling revenues, and stronger profit margins from ARCA Advanced Processing, LLC.
"AAP has made significant strides in its operations with a steady increase in revenues and profitability over the past year," said Edward R. (Jack) Cameron, president and CEO. "Additionally, our California utility replacement program was bolstered by a strong surge of advertising that increased our volumes substantially in the second quarter. While our retail revenues and gross margins remained relatively flat in the second quarter, the improvements we have made in retail operating efficiencies over the past two years have positioned us to operate effectively in the continuing difficult economic climate.”
Total 2Q 2011 revenues increased 16.6% to $32.9 million from $28.2 million in 2Q 2010.
Comparable store revenues from ApplianceSmart stores operating during the second quarters of 2011 and 2010 decreased 0.9%, and total retail revenues decreased 0.9% to $18.4 million from $18.6 million in the second quarter of 2010. Lower sales in the Georgia, Ohio, and Texas markets were partially offset by an 8.5% increase in sales in the Minnesota market.
Recycling revenues, which are comprised of appliance recycling fees and appliance replacement program revenues, increased 52.0% to $9.6 million in the second quarter of 2011 compared to revenues of $6.3 million in the second quarter of 2010. Appliance recycling fees decreased 6.8% to $4.9 million in the second quarter of 2011 compared to $5.3 million in the second quarter of 2010, due primarily to lower average per-unit recycling fees.
Replacement program revenues of $4.7 million increased 349.0% or $3.7 million from revenues of $1.0 million in the second quarter of 2010, primarily as the result of higher volumes from a California utility customer’s refrigerator replacement program. The company expects an increase in replacement program revenues in the third quarter of 2011 compared to the third quarter of 2010. However, it does not expect this trend to continue past the third quarter of 2011.
Byproduct revenues of $4.9 million increased 46.8% or $1.6 million in the second quarter of 2011 compared to $3.3 million in the second quarter of 2010. The increase in byproduct revenues was primarily the result of higher recycling volumes and higher revenues generated at AAP. Byproduct revenues include all of the revenues generated by AAP.
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