PITTSBURGH Appliance 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 2011.
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 quarter.
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 environment.
"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 recycling volumes.
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.