ALT5 Sigma (ALTS) 10-Q 27 May 15 2015 Q3 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	3 Months Ended	9 Months Ended
	Apr. 04, 2015	Sep. 27, 2014	Nov. 06, 2014
Document and Entity Information
Entity Registrant Name		APPLIANCE RECYCLING CENTERS OF AMERICA INC /MN
Entity Central Index Key		862861
Current Fiscal Year End Date		-2
Entity Current Reporting Status		Yes
Entity Filer Category		Smaller Reporting Company
Document Type		10-Q
Document Period End Date	4-Apr-15
Document Fiscal Year Focus		2015
Document Fiscal Period Focus		Q3
Amendment Flag		FALSE
Entity Common Stock, Shares Outstanding			5,800,818

CONSOLIDATED_BALANCE_SHEETS

CONSOLIDATED BALANCE SHEETS (USD $)	Apr. 04, 2015	Jan. 03, 2015	Dec. 28, 2013
In Thousands, unless otherwise specified
Statement of Financial Position [Abstract]
Other Liabilities, Noncurrent	$331
Current assets:
Cash and cash equivalents	3,558	3,523	1,948
Accounts receivable, net of allowance of $43 and $27, respectively	9,417	10,954
Inventories, net of reserves of $227 and $175, respectively	16,045	16,113
Income taxes receivable	1,180	709
Other current assets	914	1,096
Deferred income tax assets	2,086	2,082
Total current assets	33,200	34,477
Property and equipment, net	11,533	11,761
Other assets	657	708
Deferred income tax assets	14	14
Total assets	45,404	46,960
Current liabilities:
Accounts payable	8,054	6,380
Accrued expenses	7,819	8,133
Line of credit	8,270	9,237
Current maturities of long-term obligations	2,317	1,138
Total current liabilities	26,460	24,888
Long-term obligations, less current maturities	4,044	5,118
Deferred income tax liabilities	1,048	1,048
Total liabilities	31,883	31,423
Commitments and contingencies
Shareholders' equity:
Common Stock, no par value; 10,000 shares authorized; issued and outstanding: 5,581 shares and 5,571 shares, respectively	21,224	21,137
Accumulated deficit	-8,560	-6,860
Accumulated other comprehensive loss	-793	-675
Total shareholders’ equity	11,871	13,602
Noncontrolling interest	1,650	1,935
Total equity	13,521		15,537
Total liabilities and shareholders’ equity	$45,404	$46,960

CONSOLIDATED_BALANCE_SHEETS_Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Sep. 27, 2014	Dec. 28, 2013
In Thousands, unless otherwise specified
Statement of Financial Position [Abstract]
Accounts receivable, allowance	$104	$106
Inventories, reserves	$0	$0
Common Stock, shares authorized (in shares)	10,000	10,000
Common Stock, issued shares (in shares)	5,801	5,788
Common Stock, outstanding shares (in shares)	5,801	5,788

CONSOLIDATED_STATEMENTS_OF_COM

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $)	3 Months Ended
In Thousands, except Per Share data, unless otherwise specified	Apr. 04, 2015	Mar. 29, 2014
Revenues:
Retail	$17,098	$16,601
Recycling	7,823	11,684
Byproduct	2,617	4,823
Total revenues	27,538	33,108
Costs of revenues	21,670	24,047
Gross profit	5,868	9,061
Selling, general and administrative expenses	7,868	7,375
Operating income	-2,000	1,686
Other income (expense):
Interest expense, net	-321	-261
Other income (expense), net	-149	-31
Income before income taxes and noncontrolling interest	-2,470	1,394
Provision for income taxes	-485	529
Net income	-1,985	865
Net loss (income) attributable to noncontrolling interest	285	-137
Net income attributable to controlling interest	-1,700	728
Income per common share:
Basic (in dollars per share)	($0.29)	$0.13
Diluted (in dollars per share)	($0.29)	$0.12
Weighted average common shares outstanding:
Basic (in shares)	5,795	5,577
Diluted (in shares)	5,795	5,852
Other comprehensive income (loss), net of tax:
Effect of foreign currency translation adjustments	-118	-96
Total other comprehensive income (loss), net of tax	-118	-96
Comprehensive income	-2,103	769
Comprehensive loss (income) attributable to noncontrolling interest	285	-137
Comprehensive income attributable to controlling interest	($1,818)	$632

CONSOLIDATED_STATEMENTS_OF_CAS

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Apr. 04, 2015	Mar. 29, 2014
Operating activities
Net income (loss)	($1,985)	$865
Adjustments to reconcile net income (loss) to net cash and cash equivalents (used in) provided by operating activities:
Depreciation and amortization	330	334
Share-based compensation	63	47
Amortization of deferred gain	0	-122
Amortization of debt issuance costs	28	27
Other	-5	-160
Changes in assets and liabilities:
Accounts receivable	1,537	1,061
Inventories	68	447
Other current assets	182	-444
Accounts payable and accrued expenses	1,322	-13
Income taxes payable	-470	587
Net cash flows provided by operating activities	1,070	2,629
Investing activities
Purchases of property and equipment	-82	-56
Proceeds from Sale of Property, Plant, and Equipment	5	12
Net cash flows used in investing activities	-77	-44
Financing activities
Net payments under line of credit	-967	-1,325
Payments on debt obligations	-220	-254
Proceeds from issuance of debt obligations	325	0
Proceeds from issuance of Common Stock	24	24
Net cash flows used in financing activities	-838	-1,555
Effect of changes in exchange rate on cash and cash equivalents	-120	-80
Increase (decrease) in cash and cash equivalents	35	950
Cash and cash equivalents at beginning of period	3,523	1,948
Cash and cash equivalents at end of period	3,558	2,898
Supplemental disclosures of cash flow information
Cash payments for interest	165	213
Cash payments for income taxes, net of refunds	8	103
Non-cash investing and financing activities
Equipment acquired under capital lease and other financing obligations	$0	$100

Nature_of_Business_and_Basis_o

Nature of Business and Basis of Presentation	3 Months Ended
	Apr. 04, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Nature of Business and Basis of Presentation	Nature of Business and Basis of Presentation
	Appliance Recycling Centers of America, Inc. and subsidiaries (“we,” the “Company” or “ARCA”) are in the business of providing turnkey appliance recycling and replacement services for electric utilities and other sponsors of energy efficiency programs.  We also sell new major household appliances through a chain of Company-owned stores under the name ApplianceSmart®.  In addition, we have a 50% interest in a joint venture operating under the name ARCA Advanced Processing, LLC (“AAP”), which recycles appliances from twelve states in the Northeast and Mid-Atlantic regions of the United States for General Electric Company (“GE”) acting through its GE Appliances business component.  These appliances include units manufactured by GE as well as by other manufacturers.
	The accompanying balance sheet as of January 3, 2015, which has been derived from audited consolidated financial statements and the unaudited consolidated financial statements have been prepared by the Company in accordance with generally accepted accounting principles (“GAAP”) in the United States of America for interim financial information and Article 8 of Regulation S-X promulgated by the United States Securities and Exchange Commission (the “SEC”).  Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements.  In the opinion of management, normal and recurring adjustments and accruals considered necessary for a fair presentation for the periods indicated have been included.  Operating results for the three-month periods ended April 4, 2015 and March 29, 2014, are presented using 13-week periods.  The results of operations for any interim period are not necessarily indicative of the results for the year.
	In preparation of the Company’s financial statements, management is required to make estimates and assumptions that affect reported amounts of assets and liabilities and related revenues and expenses during the reporting periods.  As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates.
	These financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes thereto for the year ended January 3, 2015, included in the Company’s Annual Report on Form 10-K/A filed with the SEC on May 18, 2015.
	Principles of consolidation:  The consolidated financial statements include the accounts of Appliance Recycling Centers of America, Inc. and our subsidiaries.  All significant intercompany accounts and transactions have been eliminated in consolidation.
	ApplianceSmart, Inc., a Minnesota corporation, is a wholly owned subsidiary that was formed through a corporate reorganization in July 2011 to hold our business of selling new major household appliances through a chain of Company-owned retail stores.  ARCA Canada Inc., a Canadian corporation, is a wholly owned subsidiary that was formed in September 2006 to provide turnkey recycling services for electric utility energy efficiency programs.  ARCA Recycling, Inc., a California corporation, is a wholly owned subsidiary that was formed in November 1991 to provide turnkey recycling services for electric utility energy efficiency programs.  The operating results of our wholly owned subsidiaries are consolidated in our financial statements.
	AAP is a joint venture that was formed in October 2009 between ARCA and 4301 Operations, LLC (“4301”) to support ARCA’s agreement, as amended, with GE acting through its GE Appliances business component.  Both ARCA and 4301 have a 50% interest in AAP.  GE sells its recyclable appliances generated from twelve states in the Northeast and Mid-Atlantic regions of the United States to ARCA, which collects, processes and recycles the appliances.  The agreement requires that ARCA will only recycle, and will not sell for re-use or resale, the recyclable appliances purchased from GE.  The term of the agreement is for six years from the first date of appliance collection, which was March 31, 2010.  AAP established a regional processing center in Philadelphia, Pennsylvania, at which the recyclable appliances are processed.  AAP commenced operations in February 2010 and has the exclusive rights to service the GE agreement as a subcontractor for ARCA.  The financial position and results of operations of AAP are consolidated in our financial statements based on our conclusion that AAP is a variable interest entity due to our contribution in excess of 50% of the total equity, subordinated debt and other forms of financial support. We have a controlling financial interest in AAP, through our contractual agreement with GE, which is material to AAP, and we have provided substantially all of the financial support to fund the operations of AAP since its inception.

Significant_Accounting_Policie

Significant Accounting Policies	3 Months Ended
	Apr. 04, 2015
Accounting Policies [Abstract]
Significant Accounting Policies
	Inventories, consisting principally of appliances, are stated at the lower of cost, determined on a specific identification basis, or market and consist of:
		April 4,		January 3,
		2015		2015
	Appliances held for resale	$	15,761	$	15,511
	Processed metals from recycled appliances held for resale	253		571
	Other	31		31
		$	16,045	$	16,113
	We provide estimated provisions for the obsolescence of our appliance inventories, including adjustments to market, based on various factors, including the age of such inventory and our management’s assessment of the need for such provisions.  We look at historical inventory agings and margin analysis in determining our provision estimate.  A revised cost basis is used once a provision for obsolescence is recorded.

Variable_Interest_Entity

Variable Interest Entity	3 Months Ended
	Apr. 04, 2015
Variable Interest Entity
Variable Interest Entity	Variable Interest Entity
	The financial position and results of operations of AAP are consolidated in our financial statements based on our conclusion that AAP is a variable interest entity due to our contribution in excess of 50% of the total equity, subordinated debt and other forms of financial support. We have a controlling financial interest in AAP through our contractual agreement with GE, which is material to AAP, and we have provided substantially all of the financial support to fund the operations of AAP since its inception.  The financial position and results of operations for AAP are reported in our recycling segment.
	The following table summarizes the assets and liabilities of AAP as of April 4, 2015, and January 3, 2015:
		April 4,			January 3,
		2015			2015
	Assets
	Current assets	$	758		$	912
	Property and equipment, net	8,583			8,775
	Other assets	123			127
	Total Assets	$	9,464		$	9,814
	Liabilities
	Accounts payable	$	902		$	923
	Accrued expenses	249			199
	Current maturities of long-term debt obligations	1,115			795
	Long-term debt obligations, net of current maturities	3,608			3,737
	Other liabilities (a)	289			289
	Total Liabilities	$	6,163		$	5,943
	(a)          Other liabilities represent loans between ARCA and AAP that are eliminated in consolidation.
	The following table summarizes the operating results of AAP for the three months ended April 4, 2015, and March 29, 2014:
		Three Months Ended
		April 4,			March 29,
		2015			2014
	Revenues	$	1,850		$	2,824
	Gross profit	6			890
	Operating income (loss)	(516		)	342
	Net income (loss)	(570		)	274

Other_Assets

Other Assets	3 Months Ended
	Apr. 04, 2015
Other Assets, Noncurrent [Abstract]
Other Assets	Other Assets
	Other assets as of April 4, 2015, and January 3, 2015, consist of the following:
		April 4,		January 3,
		2015		2015
	Deposits	$	371	$	375
	Recycling contract, net	80		100
	Debt issuance costs, net	147		174
	Patent costs	21		21
	Goodwill	38		38
		$	657	$	708
	For the three months ended April 4, 2015, and March 29, 2014, we recorded amortization expense of $20 and $19, respectively, related to our recycling contract. For the three months ended April 4, 2015, and March 29, 2014, we recorded non-cash interest expense of $28 and $27, respectively, related to debt issuance costs.

Accrued_Expenses

Accrued Expenses	3 Months Ended
	Apr. 04, 2015
Payables and Accruals [Abstract]
Accrued Expenses	Accrued Expenses
	Accrued expenses as of April 4, 2015, and January 3, 2015, consist of the following:
		April 4,		January 3,
		2015		2015
	Sales tax estimates, including interest	$	5,031	$	4,837
	Compensation and benefits	1,113		1,322
	Accrued incentive and rebate checks	405		381
	Accrued rent	336		304
	Warranty expense	28		30
	Accrued payables	174		306
	Deferred revenue	274		276
	Other	458		677
		$	7,819	$	8,133

Line_of_Credit

Line of Credit	3 Months Ended
	Apr. 04, 2015
Line of Credit Facility [Abstract]
Line of Credit	Line of Credit
	We have a Revolving Credit, Term Loan and Security Agreement, as amended, (“Revolving Credit Agreement”) with PNC Bank, National Association (“PNC”) that provides us with a $15,000 revolving line of credit.  See Note 10 for further discussion regarding the Term Loan entered into with PNC.  The Revolving Credit Agreement has a stated maturity date of January 24, 2016, if not renewed.  The Revolving Credit Agreement includes a lockbox agreement and a subjective acceleration clause and as a result we have classified the revolving line of credit as a current liability.  The Revolving Credit Agreement is collateralized by a security interest in substantially all of our assets and PNC is also secured by an inventory repurchase agreement with Whirlpool Corporation for Whirlpool purchases only.  We also issued a $750 letter of credit in favor of Whirlpool Corporation.  The Revolving Credit Agreement requires starting with the fiscal quarter ending March 29, 2014, and continuing at the end of each quarter thereafter, that we meet a minimum fixed charge coverage ratio of 1.1 to 1.0, measured on a trailing twelve-month basis.  The Revolving Credit Agreement limits investments we can purchase, the amount of other debt and leases we can incur, the amount of loans we can issue to our affiliates and the amount we can spend on fixed assets, along with prohibiting the payment of dividends. As of January 3, 2015, we were in compliance with all covenants under the Revolving Credit Agreement. As of April 4, 2015, we were not in compliance with all covenants under the Revolving Credit Agreement. We are working with PNC to obtain a waiver for such non-compliance. There is no assurance that we will obtain such a waiver. If our Revolving Credit Agreement is not renewed on the stated maturity date of January 24, 2016 or PNC accelerates the maturity date of our Revolving Credit Agreement, we would need to seek a replacement credit facility. We believe that we have adequate collateral to support a replacement facility if needed. However, there can be no assurance that a replacement facility will be available on terms satisfactory to us.
	The interest rate on the revolving line of credit is PNC Base Rate plus 1.75%, or 1-, 2- or 3-month PNC LIBOR Rate plus 2.75%.  The PNC Base Rate shall mean, for any day, a fluctuating per annum rate of interest equal to the highest of (i) the interest rate per annum announced from time to time by PNC at its prime rate, (ii) the Federal Funds Open Rate plus 0.5%, and (iii) the one-month LIBOR rate plus 100 basis points (1%).  As of April 4, 2015, the outstanding line of credit balance was $8,270 with a weighted average interest rate of 3.12%.  As of January 3, 2015, the outstanding line of credit balance was $9,237 with a weighted average interest rate of 3.30%, which included both PNC LIBOR Rate and PNC Base Rate loans.
	The amount of revolving borrowings under the Revolving Credit Agreement is based on a formula using accounts receivable and inventories.  We may not have access to the full $15,000 revolving line of credit due to the formula using accounts receivable and inventories, the amount of the letter of credit issued in favor of Whirlpool Corporation and the amount of outstanding loans between PNC and our AAP joint venture.  As of April 4, 2015, and January 3, 2015, our available borrowing capacity under the Revolving Credit Agreement was $4,756 and $4,882, respectively.

Borrowings

Borrowings	3 Months Ended
	Apr. 04, 2015
Debt Disclosure [Abstract]
Borrowings	Borrowings
	Long-term debt, capital lease and other financing obligations as of April 4, 2015, and January 3, 2015, consist of the following:
		April 4,		January 3,
		2015		2015
	PNC term loan	$	1,466	$	1,530
	Susquehanna term loans	3,242		3,316
	2.75% note, due in monthly installments of $3, including interest, due October 2024, collateralized by equipment	340		348
	Capital leases and other financing obligations	1,313		1,062
		6,361		6,256
	Less current maturities	2,317		1,138
		$	4,044	$	5,118
	On January 24, 2011, we entered into a $2,550 Term Loan (“Term Loan”) with PNC Bank to refinance the mortgage on our California facility.  The Term Loan is payable as follows, subject to acceleration upon the occurrence of an event of default or termination of the Revolving Credit Agreement: 119 consecutive monthly principal payments of $21 plus interest commencing on February 1, 2011, and continuing on the first day of each month thereafter followed by a 120th payment of all unpaid principal, interest and fees on February 1, 2021. If the Revolving Credit Agreement is not renewed, a balloon payment of $1,254 in principal plus interest and additional fees will be due on January 24, 2016. The Term Loan is collateralized with our California facility located in Compton, California. The interest rate is PNC Base Rate plus 2.25%, or 1-, 2- or 3-month PNC LIBOR Rate plus 3.25%. As of April 4, 2015, and January 3, 2015, the weighted average interest rate was 3.52% and 3.45%, respectively, which included both PNC LIBOR Rate and PNC Base Rate loans. As a result of our non-compliance with the terms of a financial covenant within the Revolving Credit Agreement we have classified the Term Loan with PNC as a current liability as of April 4, 2015.
	On March 10, 2011, AAP entered into three separate commercial term loans (“Term Loans”) with Susquehanna Bank, pursuant to the guidelines of the U.S. Small Business Administration 7(a) Loan Program.  The total amount of the Term Loans is $4,750, split into three separate loans for $2,100; $1,400; and $1,250.  The Term Loans mature in ten years and bear an interest rate of Prime plus 2.75%.  As of April 4, 2015, and January 3, 2015, the interest rate was 6.00%.  Borrowings under the Term Loans are secured by substantially all of the assets of AAP along with liens on the business assets and certain personal assets of the owners of 4301 Operations, LLC. We are a guarantor of the Term Loans along with 4301 Operations, LLC and its owners. In connection with these Term Loans, Susquehanna Bank also has a security interest in the assets of the Company. In April 2015, the Company amended these term loans so that interest only payments could be made on these Term Loans for the balance of fiscal 2015. The effect of which will defer principal reductions in fiscal 2015 by $0.3 million.
	In March of 2015, an entity controlled by the noncontrolling interest holders of AAP loaned AAP $325,000 through the issuance of promissory notes. The notes bear interest at an annual rate of 8%. In May of 2015, one of the March 2015 notes totaling $125,000 was repaid in full by AAP.
	Capital leases and other financing obligations:  We acquire certain equipment under capital leases and other financing obligations.  The cost of the equipment was $2,667 as of April 4, 2015, and January 3, 2015.  Accumulated amortization as of April 4, 2015, and January 3, 2015, was approximately $1,582 and $1,588, respectively.  Depreciation and amortization expense is included in cost of revenues and selling, general and administrative expenses.

Commitments_and_Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 27, 2014
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies
	Contracts:  We have entered into material contracts with three appliance manufacturers.  Under the agreements there are no minimum purchase commitments; however, we have agreed to indemnify the manufacturers for certain claims, allegations or losses with respect to appliances we sell.
	Litigation:  We are party from time to time to ordinary course disputes that we do not believe to be material or have merit.  We intend to vigorously defend ourselves against these ordinary course disputes.
	Sales and Use Taxes: We operate in twenty-three states in the U.S. and in various provinces in Canada. From time to time, we are subject to sales and use tax audits that could result in additional taxes, penalties and interest owed to various taxing authorities.
	As previously disclosed, the California Board of Equalization (“BOE”) is conducting a sales and use tax examination covering the California operations of Appliance Recycling Centers of America, Inc. (the “Company”) for 2011, 2012 and 2013. The Company believed it was exempt from collecting sales taxes under service agreements with utility customers that included appliance replacement programs. During the fourth quarter of 2014, the Company received communication from the BOE indicating they are not in agreement with the Company’s interpretation of the law. As a result, the Company applied for and, as of February 9, 2015, received approval to participate in the California Board of Equalization’s Managed Audit Program. The period covered under this program includes 2011, 2012, 2013 and extends through the nine-month period ended September 30, 2014. At this time, our best estimate of the amount that will be assessed by the BOE covering all periods under audit is approximately $3.9 million ($2.4 million net of income tax benefit) in sales tax and interest related to the appliance replacement programs that we administered on behalf of our customers on which we did not assess, collect or remit sales tax. Sales taxes accrued related to the restatement are recorded as a reduction of recycling revenues. The Company has been working with outside consultants to arrive at our assessment estimate and will continue to engage the services of these sales tax experts throughout the Managed Audit Program process. The sales tax amounts that we will likely be assessed relate to transactions in the period under examination by the BOE. Such assessment, however, will be subject to protest and appeal, and would not need to be funded until the matter has been fully resolved. Resolution could take up to three years.

Income_Taxes

Income Taxes	3 Months Ended
	Apr. 04, 2015
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes
	Our overall effective tax rate, based on projected full-year taxable income, was 22.2% and 37.9% for the three months ended April 4, 2015 and March 29, 2014, respectively. The effective tax rate varies from the federal statutory rate of 34% due primarily to the impact of lower foreign tax rates, state taxes and share-based compensation.
	We regularly evaluate both positive and negative evidence related to retaining a valuation allowance against our deferred tax assets.  The realization of deferred tax assets is dependent upon sufficient future taxable income during the periods when deductible temporary differences and carryforwards are expected to be available to reduce taxable income. We have concluded based on the weight of negative evidence that a valuation allowance should be maintained against certain deferred tax assets that we do not expect to utilize as of April 4, 2015.

Segment_Information

Segment Information	3 Months Ended
	Apr. 04, 2015
Segment Reporting [Abstract]
Segment Information	Segment Information
	We operate within targeted markets through two reportable segments: retail and recycling.  The retail segment is comprised of income generated through our ApplianceSmart stores, which includes appliance sales and byproduct revenues from collected appliances.  The recycling segment includes all fees charged and costs incurred for collecting, recycling and installing appliances for utilities and other customers and includes byproduct revenue, which is primarily generated through the recycling of appliances. We have included the results from consolidating AAP in our recycling segment.  The nature of products, services and customers for both segments varies significantly.  As such, the segments are managed separately.  Our Chief Executive Officer has been identified as the Chief Operating Decision Maker (“CODM”).  The CODM evaluates performance and allocates resources based on revenues and income from operations of each segment.  Income from operations represents revenues less cost of revenues and operating expenses, including certain allocated selling, general and administrative costs.  There are no inter-segment sales or transfers.
	The following tables present our segment information for periods indicated:
		Three Months Ended
		April 4,			March 29,
		2015			2014
	Revenues:
	Retail	$	17,220		$	16,937
	Recycling	10,318			16,171
	Total revenues	$	27,538		$	33,108
	Operating income (loss):
	Retail	$	(616	)	$	103
	Recycling	(1,177		)	1,743
	Unallocated corporate	(207		)	(160		)
	Total operating income (loss)	$	(2,000	)	$	1,686
	Assets:
	Retail	$	15,741		$	22,707
	Recycling	21,985			17,230
	Corporate assets not allocable	7,678			6,154
	Total assets	$	45,404		$	46,091
	Cash capital expenditures:
	Retail	$	29		$	—
	Recycling	15			4
	Corporate assets not allocable	38			52
	Total cash capital expenditures	$	82		$	56
	Depreciation and amortization:
	Retail	$	49		$	43
	Recycling	219			210
	Unallocated corporate	62			81
	Total depreciation and amortization	$	330		$	334
	Interest expense:
	Retail	$	54		$	65
	Recycling	199			92
	Unallocated corporate	68			84
	Total interest expense	$	321		$	241

Recent_Accounting_Pronouncemen

Recent Accounting Pronouncements (Notes)	3 Months Ended
	Apr. 04, 2015
Recent Accounting Pronouncements [Abstract]
New Accounting Pronouncements and Changes in Accounting Principles [Text Block]	Recent Accounting Pronouncements
	New Accounting Standards Not Yet Effective
	Revenue from Contracts with Customers: In May 2014, the Financial Accounting Standards Board (FASB) issued guidance creating Accounting Standards Codification (“ASC”) Section 606, “Revenue from Contracts with Customers”. The new section will replace Section 605, “Revenue Recognition” and creates modifications to various other revenue accounting standards for specialized transactions and industries. The section is intended to conform revenue accounting principles with a concurrently issued International Financial Reporting Standards with previously differing treatment between United States practice and those of much of the rest of the world, as well as, to enhance disclosures related to disaggregated revenue information. Entities will have the option to apply the standard retrospectively to all prior periods presented, or to apply it retrospectively only to contracts existing at the effective date, with the cumulative effect of the standard recorded as an adjustment to beginning retained earnings. The updated guidance will be effective for us for the annual reporting period beginning with our fiscal 2017, and interim periods within that year. We will adopt the new provisions of this accounting standard at the beginning of fiscal year 2017, given that early adoption is not an option. We will further study the implications of this statement in order to evaluate the expected impact on the consolidated financial statements.
	ASU 2015-02, Amendments to the Consolidation Analysis:  This standard, which will become effective January 1, 2016 for the Company, provides amended guidance on whether reporting entities should consolidate certain legal entities, including limited partnerships.  We are evaluating the impact of the standard on the consolidated financial statements.
	ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs:  This standard, which will be effective January 1, 2016 for the Company, requires that debt issuance costs be presented as a direct deduction from the carrying amount of long-term debt on the balance sheet.  Presently, debt issuance costs are reported as an asset.  The new guidance aligns the presentation of debt issuance costs with debt discounts and premiums.  The standard is to be applied retrospectively to all prior periods presented.  As of April 4, 2015, we had $0.1 million of unamortized debt issuance costs.  This amounts is recorded in other non-current assets on the consolidated balance sheets.

Significant_Accounting_Policie1

Significant Accounting Policies (Policies)	3 Months Ended
	Apr. 04, 2015
Accounting Policies [Abstract]
Nature of business and basis of presentation	Nature of Business and Basis of Presentation
	Appliance Recycling Centers of America, Inc. and subsidiaries (“we,” the “Company” or “ARCA”) are in the business of providing turnkey appliance recycling and replacement services for electric utilities and other sponsors of energy efficiency programs.  We also sell new major household appliances through a chain of Company-owned stores under the name ApplianceSmart®.  In addition, we have a 50% interest in a joint venture operating under the name ARCA Advanced Processing, LLC (“AAP”), which recycles appliances from twelve states in the Northeast and Mid-Atlantic regions of the United States for General Electric Company (“GE”) acting through its GE Appliances business component.  These appliances include units manufactured by GE as well as by other manufacturers.
	The accompanying balance sheet as of January 3, 2015, which has been derived from audited consolidated financial statements and the unaudited consolidated financial statements have been prepared by the Company in accordance with generally accepted accounting principles (“GAAP”) in the United States of America for interim financial information and Article 8 of Regulation S-X promulgated by the United States Securities and Exchange Commission (the “SEC”).  Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements.  In the opinion of management, normal and recurring adjustments and accruals considered necessary for a fair presentation for the periods indicated have been included.  Operating results for the three-month periods ended April 4, 2015 and March 29, 2014, are presented using 13-week periods.  The results of operations for any interim period are not necessarily indicative of the results for the year.
	In preparation of the Company’s financial statements, management is required to make estimates and assumptions that affect reported amounts of assets and liabilities and related revenues and expenses during the reporting periods.  As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates.
	These financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes thereto for the year ended January 3, 2015, included in the Company’s Annual Report on Form 10-K/A filed with the SEC on May 18, 2015.
Principles of consolidation	Principles of consolidation:  The consolidated financial statements include the accounts of Appliance Recycling Centers of America, Inc. and our subsidiaries.  All significant intercompany accounts and transactions have been eliminated in consolidation.
	ApplianceSmart, Inc., a Minnesota corporation, is a wholly owned subsidiary that was formed through a corporate reorganization in July 2011 to hold our business of selling new major household appliances through a chain of Company-owned retail stores.  ARCA Canada Inc., a Canadian corporation, is a wholly owned subsidiary that was formed in September 2006 to provide turnkey recycling services for electric utility energy efficiency programs.  ARCA Recycling, Inc., a California corporation, is a wholly owned subsidiary that was formed in November 1991 to provide turnkey recycling services for electric utility energy efficiency programs.  The operating results of our wholly owned subsidiaries are consolidated in our financial statements.
	AAP is a joint venture that was formed in October 2009 between ARCA and 4301 Operations, LLC (“4301”) to support ARCA’s agreement, as amended, with GE acting through its GE Appliances business component.  Both ARCA and 4301 have a 50% interest in AAP.  GE sells its recyclable appliances generated from twelve states in the Northeast and Mid-Atlantic regions of the United States to ARCA, which collects, processes and recycles the appliances.  The agreement requires that ARCA will only recycle, and will not sell for re-use or resale, the recyclable appliances purchased from GE.  The term of the agreement is for six years from the first date of appliance collection, which was March 31, 2010.  AAP established a regional processing center in Philadelphia, Pennsylvania, at which the recyclable appliances are processed.  AAP commenced operations in February 2010 and has the exclusive rights to service the GE agreement as a subcontractor for ARCA.  The financial position and results of operations of AAP are consolidated in our financial statements based on our conclusion that AAP is a variable interest entity due to our contribution in excess of 50% of the total equity, subordinated debt and other forms of financial support. We have a controlling financial interest in AAP, through our contractual agreement with GE, which is material to AAP, and we have provided substantially all of the financial support to fund the operations of AAP since its inception.
Inventories	Inventories, consisting principally of appliances, are stated at the lower of cost, determined on a specific identification basis, or market and consist of:
		April 4,		January 3,
		2015		2015
	Appliances held for resale	$	15,761	$	15,511
	Processed metals from recycled appliances held for resale	253		571
	Other	31		31
		$	16,045	$	16,113
	We provide estimated provisions for the obsolescence of our appliance inventories, including adjustments to market, based on various factors, including the age of such inventory and our management’s assessment of the need for such provisions.  We look at historical inventory agings and margin analysis in determining our provision estimate.  A revised cost basis is used once a provision for obsolescence is recorded.

Significant_Accounting_Policie2

Significant Accounting Policies (Tables)	3 Months Ended
	Apr. 04, 2015
Accounting Policies [Abstract]
Schedule of inventories, consisting principally of appliances, are stated at the lower of cost, determined on a specific identification basis, or market	Inventories, consisting principally of appliances, are stated at the lower of cost, determined on a specific identification basis, or market and consist of:
		April 4,		January 3,
		2015		2015
	Appliances held for resale	$	15,761	$	15,511
	Processed metals from recycled appliances held for resale	253		571
	Other	31		31
		$	16,045	$	16,113

Variable_Interest_Entity_Table

Variable Interest Entity (Tables)	3 Months Ended
	Apr. 04, 2015
Variable Interest Entity
Summary of assets and liabilities	The following table summarizes the assets and liabilities of AAP as of April 4, 2015, and January 3, 2015:
		April 4,			January 3,
		2015			2015
	Assets
	Current assets	$	758		$	912
	Property and equipment, net	8,583			8,775
	Other assets	123			127
	Total Assets	$	9,464		$	9,814
	Liabilities
	Accounts payable	$	902		$	923
	Accrued expenses	249			199
	Current maturities of long-term debt obligations	1,115			795
	Long-term debt obligations, net of current maturities	3,608			3,737
	Other liabilities (a)	289			289
	Total Liabilities	$	6,163		$	5,943
Summary of operating results	The following table summarizes the operating results of AAP for the three months ended April 4, 2015, and March 29, 2014:
		Three Months Ended
		April 4,			March 29,
		2015			2014
	Revenues	$	1,850		$	2,824
	Gross profit	6			890
	Operating income (loss)	(516		)	342
	Net income (loss)	(570		)	274

Other_Assets_Tables

Other Assets (Tables)	3 Months Ended
	Apr. 04, 2015
Other Assets, Noncurrent [Abstract]
Schedule of other assets	Other assets as of April 4, 2015, and January 3, 2015, consist of the following:
		April 4,		January 3,
		2015		2015
	Deposits	$	371	$	375
	Recycling contract, net	80		100
	Debt issuance costs, net	147		174
	Patent costs	21		21
	Goodwill	38		38
		$	657	$	708

Accrued_Expenses_Tables

Accrued Expenses (Tables)	3 Months Ended
	Apr. 04, 2015
Payables and Accruals [Abstract]
Schedule of accrued expenses	Accrued expenses as of April 4, 2015, and January 3, 2015, consist of the following:
		April 4,		January 3,
		2015		2015
	Sales tax estimates, including interest	$	5,031	$	4,837
	Compensation and benefits	1,113		1,322
	Accrued incentive and rebate checks	405		381
	Accrued rent	336		304
	Warranty expense	28		30
	Accrued payables	174		306
	Deferred revenue	274		276
	Other	458		677
		$	7,819	$	8,133

Borrowings_Tables

Borrowings (Tables)	3 Months Ended
	Apr. 04, 2015
Debt Disclosure [Abstract]
Schedule of long-term debt, capital lease and other financing obligations	Long-term debt, capital lease and other financing obligations as of April 4, 2015, and January 3, 2015, consist of the following:
		April 4,		January 3,
		2015		2015
	PNC term loan	$	1,466	$	1,530
	Susquehanna term loans	3,242		3,316
	2.75% note, due in monthly installments of $3, including interest, due October 2024, collateralized by equipment	340		348
	Capital leases and other financing obligations	1,313		1,062
		6,361		6,256
	Less current maturities	2,317		1,138
		$	4,044	$	5,118

Segment_Information_Tables

Segment Information (Tables)	3 Months Ended
	Apr. 04, 2015
Segment Reporting [Abstract]
Schedule of segment information	The following tables present our segment information for periods indicated:
		Three Months Ended
		April 4,			March 29,
		2015			2014
	Revenues:
	Retail	$	17,220		$	16,937
	Recycling	10,318			16,171
	Total revenues	$	27,538		$	33,108
	Operating income (loss):
	Retail	$	(616	)	$	103
	Recycling	(1,177		)	1,743
	Unallocated corporate	(207		)	(160		)
	Total operating income (loss)	$	(2,000	)	$	1,686
	Assets:
	Retail	$	15,741		$	22,707
	Recycling	21,985			17,230
	Corporate assets not allocable	7,678			6,154
	Total assets	$	45,404		$	46,091
	Cash capital expenditures:
	Retail	$	29		$	—
	Recycling	15			4
	Corporate assets not allocable	38			52
	Total cash capital expenditures	$	82		$	56
	Depreciation and amortization:
	Retail	$	49		$	43
	Recycling	219			210
	Unallocated corporate	62			81
	Total depreciation and amortization	$	330		$	334
	Interest expense:
	Retail	$	54		$	65
	Recycling	199			92
	Unallocated corporate	68			84
	Total interest expense	$	321		$	241

Nature_of_Business_and_Basis_o1

Nature of Business and Basis of Presentation (Details)	3 Months Ended
	Apr. 04, 2015	Sep. 27, 2014
	W
	state
Nature of Business and Basis of Presentation
Interest in a joint venture (as a percent)	50.00%
Number of States in which Entity Operates	12	23
Number of weeks reflected in operating results	13
Term of contractual agreement between GE and the entity	6 years
4301
Nature of Business and Basis of Presentation
Interest in a joint venture (as a percent)	50.00%

Significant_Accounting_Policie3

Significant Accounting Policies (Details) (USD $)	Sep. 27, 2014	Dec. 28, 2013
In Thousands, unless otherwise specified
Trade receivables
Accounts receivable, allowance	$104	$106

Significant_Accounting_Policie4

Significant Accounting Policies (Details 1) (USD $)	Apr. 04, 2015	Jan. 03, 2015	Sep. 27, 2014	Dec. 28, 2013
In Thousands, unless otherwise specified
Inventories
Appliances held for resale	$15,761	$15,511
Processed metals from recycled appliances held for resale	253	571
Less provision for inventory obsolescence	31	31	0	0
Inventory, Net	$16,045	$16,113

Significant_Accounting_Policie5

Significant Accounting Policies (Details 2) (USD $)	Apr. 04, 2015	Jan. 03, 2015
In Thousands, unless otherwise specified
Property and equipment
Property plant and equipment, net	$11,533	$11,761

Significant_Accounting_Policie6

Significant Accounting Policies (Details 3) (USD $)	Apr. 04, 2015	Jan. 03, 2015
In Thousands, unless otherwise specified
Changes in warranty accrual
Beginning Balance	$28	$30
Ending Balance	$28	$30

Significant_Accounting_Policie7

Significant Accounting Policies (Details 5) (USD $)	3 Months Ended
In Thousands, except Per Share data, unless otherwise specified	Apr. 04, 2015	Mar. 29, 2014
Numerator:
Net income (loss) attributable to controlling interest	($1,700)	$728
Denominator:
Weighted average shares outstanding - basic	5,795	5,577
Weighted average shares outstanding - diluted (in shares)	5,795	5,852
Income per share:
Basic (loss) (in dollars per share)	($0.29)	$0.13
Diluted (in dollars per share)	($0.29)	$0.12

Variable_Interest_Entity_Detai

Variable Interest Entity (Details) (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Apr. 04, 2015	Mar. 29, 2014	Jan. 03, 2015
Variable Interest Entity, Classification of Carrying Amount, Assets
Current assets	$33,200		$34,477
Property and equipment, net	11,533		11,761
Other assets	657		708
Total	9,464		9,814
Liabilities
Accounts payable	8,054		6,380
Accrued expenses	7,819		8,133
Current maturities of long-term debt obligations	2,317		1,138
Long-term obligations, less current maturities	4,044		5,118
Other Liabilities, Noncurrent	331
Total	2,633		2,338
Operating results of AAP
Revenues	27,538	33,108
Gross profit (loss)	5,868	9,061
Operating income (loss)	-2,000	1,686
Net income (loss)	-1,985	865
AAP
Variable Interest Entity, Classification of Carrying Amount, Assets
Current assets	758		912
Property and equipment, net	8,583		8,775
Other assets	123		127
Total	9,464		9,814
Liabilities
Accounts payable	902		923
Accrued expenses	249		199
Current maturities of long-term debt obligations	1,115		795
Long-term obligations, less current maturities	3,608		3,737
Other Liabilities, Noncurrent	289		289
Total	6,163		5,943
Operating results of AAP
Revenues	1,850	2,824
Gross profit (loss)	6	890
Operating income (loss)	-516	342
Net income (loss)	($570)	$274

Other_Assets_Details

Other Assets (Details) (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Apr. 04, 2015	Mar. 29, 2014	Jan. 03, 2015
Other Assets, Noncurrent [Abstract]
Goodwill	$38		$38
Deposits	371		375
Recycling contract, net	80		100
Debt issuance costs, net	147		174
Patent costs	21		21
Total	657		708
Amortization expense related to recycling contract	20	19
Non-cash interest expense related to debt issuance costs	$28	$27

Accrued_Expenses_Details

Accrued Expenses (Details) (USD $)	Apr. 04, 2015	Jan. 03, 2015
In Thousands, unless otherwise specified
Payables and Accruals [Abstract]
Compensation and benefits	$1,113	$1,322
Accrued incentive and rebate checks	405	381
Accrued rent	336	304
Warranty expense	28	30
Accrued payables	174	306
Deferred revenue	274	276
Other	458	677
Total	$7,819	$8,133

Line_of_Credit_Details

Line of Credit (Details) (USD $)	3 Months Ended
	Apr. 04, 2015	Jan. 03, 2015
Line of Credit
Interest rate on the revolving line of credit	one-month LIBOR rate
Outstanding balance under the Revolving Credit Agreement	$8,270,000	$9,237,000
Revolving line of credit | PNC
Line of Credit
Amount of revolving line of credit	15,000,000
Minimum fixed charge coverage ratio	1.1
Trailing period for measurement of fixed charge coverage ratio (in months)	12 months
Interest rate margin (as a percent)	1.75%
Outstanding balance under the Revolving Credit Agreement	8,270,000	9,237,000
Weighted average interest rate (as a percent)	3.12%	3.30%
Available borrowing capacity under the Revolving Credit Agreement	4,756,000	4,882,000
Revolving line of credit | PNC | Base Rate
Line of Credit
Interest rate on the revolving line of credit	PNC Base Rate
Revolving line of credit | PNC | LIBOR Rate
Line of Credit
Interest rate on the revolving line of credit	1-, 2- or 3-month PNC LIBOR Rate
Interest rate margin (as a percent)	2.75%
Revolving line of credit | PNC | Federal Funds Open Rate
Line of Credit
Interest rate on the revolving line of credit	Federal Funds Open Rate
Interest rate margin (as a percent)	0.50%
Revolving line of credit | PNC | One month LIBOR rate
Line of Credit
Interest rate margin (as a percent)	1.00%
Letter of credit | PNC
Line of Credit
Letter of credit issued in favor of Whirlpool Corporation	$750,000

Deferred_Gain_Details

Deferred Gain (Details) (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Apr. 04, 2015	Mar. 29, 2014
Deferred Revenue Disclosure [Abstract]
Amortization of deferred gain	$0	$122

Borrowings_Details

Borrowings (Details) (USD $)	3 Months Ended	1 Months Ended
	Apr. 04, 2015	Feb. 28, 2011	Jan. 30, 2011	Mar. 30, 2011	Jan. 03, 2015	Sep. 27, 2014
		payment		loan
Borrowings
Long-term debt, capital lease and other financing obligations	$6,361,000				$6,256,000
Less current maturities	2,317,000				1,138,000
Long-term debt, capital lease and other financing obligations, less current maturities	4,044,000				5,118,000
Interest rate	one-month LIBOR rate
AAP
Borrowings
Less current maturities	1,115,000				795,000
Long-term debt, capital lease and other financing obligations, less current maturities	3,608,000				3,737,000
Floating rate term loan, due in monthly installments of $21, plus interest, due February 2021, collateralized by land and building
Borrowings
Long-term debt, capital lease and other financing obligations	1,466,000				1,530,000
Floating rate term loan, due in monthly installments of $21, plus interest, due February 2021, collateralized by land and building | PNC
Borrowings
Monthly installments		21,000
Balloon Payment	1,254,000
Term loan to refinance the existing mortgage			2,550,000
Number of consecutive monthly principal payments plus interest		119
Interest rate at the end of the period (as a percent)	3.52%				3.45%
Floating rate term loan, due in monthly installments of $21, plus interest, due February 2021, collateralized by land and building | Base Rate | PNC
Borrowings
Interest rate	PNC Base Rate
Floating rate term loan, due in monthly installments of $21, plus interest, due February 2021, collateralized by land and building | Base Rate, Condition One | PNC
Borrowings
Interest rate margin (as a percent)	2.25%
Floating rate term loan, due in monthly installments of $21, plus interest, due February 2021, collateralized by land and building | LIBOR Rate | PNC
Borrowings
Interest rate	1-, 2- or 3-month PNC LIBOR Rate
Interest rate margin (as a percent)	3.25%
Floating rate term loans, due in monthly installments of $54, including interest, due March 2021, collateralized by equipment
Borrowings
Long-term debt, capital lease and other financing obligations	3,242,000				3,316,000
Floating rate term loans, due in monthly installments of $54, including interest, due March 2021, collateralized by equipment | Susquehanna Bank | AAP
Borrowings
Term loan to refinance the existing mortgage				4,750,000
Interest rate at the end of the period (as a percent)	6.00%
Number of separate commercial term loans entered into during period				3
Term Loans maturity period (in years)				10 years
Floating rate term loans, due in monthly installments of $54, including interest, due March 2021, collateralized by equipment | Base Rate | Susquehanna Bank | AAP
Borrowings
Interest rate margin (as a percent)	2.75%
Floating rate term loans, due in monthly installments of $54, including interest, due March 2021, collateralized by equipment | Prime | Susquehanna Bank | AAP
Borrowings
Interest rate	Prime
Debt instrument term loan one | Susquehanna Bank | AAP
Borrowings
Term loan to refinance the existing mortgage				2,100,000
Debt instrument term loan two | Susquehanna Bank | AAP
Borrowings
Term loan to refinance the existing mortgage				1,400,000
Debt instrument term loan three | Susquehanna Bank | AAP
Borrowings
Term loan to refinance the existing mortgage				1,250,000
2.75% note, due in monthly installments of $3, including interest, due October 2024, collateralized by equipment
Borrowings
Long-term debt, capital lease and other financing obligations	340,000				348,000
Stated interest rate (as a percent)	2.75%
Monthly installments	3,000
10.00% note, due in monthly installments of $10, including interest, due December 2014
Borrowings
Stated interest rate (as a percent)	10.00%
Monthly installments	13,000
Capital leases and other financing obligations
Borrowings
Long-term debt, capital lease and other financing obligations	1,313,000				1,062,000
Capital leases and other financing obligations
Cost of equipment acquired under capital leases and other financing obligations	2,667,000
Accumulated amortization	$1,582,000				$1,588,000

Commitments_and_Contingencies_

Commitments and Contingencies (Details)	Apr. 04, 2015	Sep. 27, 2014
		manufacturer
Commitments and Contingencies Disclosure [Abstract]
Number of appliance manufacturers that have material contracts with the Company		3
Number of States in which Entity Operates	12	23

Income_Taxes_Details

Income Taxes (Details)	3 Months Ended
	Apr. 04, 2015	Mar. 29, 2014
Income Tax Disclosure [Abstract]
Effective tax rate	22.20%	37.90%
Statutory rate	34.00%

Stockholders_Equity_Details_2

Stockholders' Equity (Details 2)	Sep. 27, 2014	Dec. 28, 2013
In Thousands, unless otherwise specified
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common Stock, issued shares (in shares)	5,801	5,788

Segment_Information_Details

Segment Information (Details) (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Apr. 04, 2015	Mar. 29, 2014	Jan. 03, 2015
	segment
Segment Information
Revenues	$27,538	$33,108
Operating income (loss)	-2,000	1,686
Assets	45,404	46,091	46,960
Cash capital expenditures	82	56
Depreciation and amortization	330	334
Interest Expense	321	261
Interest Expense	-321	-241
Number of reportable segments	2
Retail
Segment Information
Revenues	17,220	16,937
Operating income (loss)	-616	103
Assets	15,741	22,707
Cash capital expenditures	29	0
Depreciation and amortization	49	43
Interest Expense	54	65
Recycling
Segment Information
Revenues	10,318	16,171
Operating income (loss)	-1,177	1,743
Assets	21,985	17,230
Cash capital expenditures	15	4
Depreciation and amortization	219	210
Interest Expense	199	92
Unallocated corporate
Segment Information
Operating income (loss)	-207	-160
Assets	7,678	6,154
Cash capital expenditures	38	52
Depreciation and amortization	62	81
Interest Expense	$68	$84