Recycling Centers of America Inc. (Arca) is hopeful that a
rebound in residential construction will result in the
companys return to profitability after falling into the
red last year.
The Minneapolis-based appliance
retailer and recycler posted a fourth-quarter net loss of $2.06
million, in contrast to net income of $3,000 in the same period
a year earlier, on revenue that fell 5.1 percent to $26.56
million. It has not turned a profit since the fourth quarter of
The quarterly loss included a
$541,000 impairment charge for its Philadelphia-based joint
venture, Arca Advanced Processing LLC. The company said the
units revenues declined just 7 percent to $2.9 million
even though ferrous prices fell as much as 26 percent in the
Arcas recycling segment
posted fourth-quarter revenue of nearly $6.85 million, up 7.6
percent from $6.36 million a year earlier, but revenue by its
byproduct segment fell 13.8 percent to $4.49 million from $5.21
million as recycling volumes decreased in a falling price
"Our outlook remains positive,
bolstered by confidence in the long-term synergies across our
business units and some early signs of economic recovery
indicated by the housing market," president and chief executive
officer Edward R. Cameron said.
Improved housing construction
and activity could benefit its appliance retail sales and
Arca, which is out of compliance
on two of its financial covenants, is negotiating a deal with
its lender to extend its $15-million credit agreement by two
years and waive the default caused by being out of compliance.
The deal with PNC Bank NA, Pittsburgh, is expected to be
completed in March.