Appliance Recycling Centers of America Inc. (Nasdaq: ARCI) suddenly spiked this afternoon, climbing 40.24 percent after a brief halt at noon, CDT.
The source of the spike seems to be the second quarter 2007 financial results the company reported this afternoon. According to the company’s financials, ARCI’s sales for the second quarter of 2007 totaled $22,582,000, a promising 18 percent increase over the previous year’s sales figures of $19,161,000. The company also reported 16 percent increase in total retail sales, while the recycling revenues for the second quarter jumped 33 percent to $3,353,000.
Appliance Recycling President and CEO Edward Cameron attributed the increases to new outlets and improved word-of-mouth.
“Sales of our ApplianceSmart operation rebounded solidly in this year’s second quarter, with most of our markets posting improved year-over-year growth,” Cameron said in the statement. “Our retail business also benefited from the opening of two additional factory outlets in the Atlanta market during the past year. ApplianceSmart’s sales growth is particularly encouraging in view of the continuation of high gasoline prices and weakness in the housing industry. ApplianceSmart is also realizing improved operating efficiencies, resulting from initiatives aimed at strengthening inventory management and other business systems.”
Cameron went on to say that growing interest in Appliance Recycling’s residential energy conservation programs – programs that have been ongoing for the past twenty years – have “translated into two large new programs.” One of these projects is the planned replacement and recycling of 50,000 old, inefficient refrigerators for low-income residents in Los Angeles, which the company expects to generate total revenue of $25 million. The other project is a multi-year-length recycling contract with the Ontario Power Authority, which will reportedly generate up to $40 million over the course of the program.
Cameron looked forward to continued growth for the company.
“We believe the third quarter outlook for our ApplianceSmart operation is favorable, although we remain cautious about the potential impact of high fuel prices and the downturn in the housing market,” Cameron said. “In addition, the [Southern California Public Power Authority] and [Ontario Power Authority] programs are expected to have a greater positive impact on our appliance recycling operation during the third quarter.”
Shares of ARCI hit $5.50 by mid-afternoon.
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