ALT5 Sigma (ALTS) 10-Q 12 Aug 15 2015 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jul. 04, 2015	Aug. 07, 2015
Document and Entity Information
Entity Registrant Name	APPLIANCE RECYCLING CENTERS OF AMERICA INC /MN
Entity Central Index Key	862,861
Current Fiscal Year End Date	--01-02
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Document Type	10-Q
Document Period End Date	Jul. 4, 2015
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Common Stock, Shares Outstanding		5,800,818

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jul. 04, 2015	Jan. 03, 2015
Statement of Financial Position [Abstract]
Other Liabilities, Noncurrent	$ 246	$ 369
Current assets:
Cash and cash equivalents	3,641	3,523
Accounts receivable, net of allowance of $104 and $106, respectively	11,115	10,954
Inventories	15,569	16,113
Income taxes receivable	869	709
Other current assets	1,226	1,096
Deferred income tax assets	2,107	2,082
Total current assets	34,527	34,477
Property and equipment, net	11,361	11,761
Other assets	750	708
Deferred income tax assets	14	14
Total assets	46,652	46,960
Current liabilities:
Accounts payable	8,261	6,380
Accrued expenses	7,890	8,133
Line of credit	9,104	9,237
Current maturities of long-term obligations	2,254	1,138
Total current liabilities	27,509	24,888
Long-term obligations, less current maturities	3,872	5,118
Deferred income tax liabilities	1,048	1,048
Total liabilities	$ 32,675	$ 31,423
Commitments and contingencies
Shareholders' equity:
Common Stock, no par value; 10,000 shares authorized; issued and outstanding: 5,800 shares and 5,788 shares, respectively	$ 21,209	$ 21,137
Accumulated deficit	(7,958)	(6,860)
Accumulated other comprehensive loss	(808)	(675)
Total shareholders’ equity	12,443	13,602
Noncontrolling interest	1,534	1,935
Total equity	13,977	15,537
Total liabilities and shareholders’ equity	$ 46,652	$ 46,960

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Jul. 04, 2015	Jan. 03, 2015
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
Assets of the consolidated variable interest entity	$ 9,201	$ 9,814
Liabilities of the consolidated variable interest entity	$ 2,600	$ 2,338

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 04, 2015	Jun. 28, 2014	Jul. 04, 2015	Jun. 28, 2014
Revenues:
Retail	$ 17,494	$ 17,461	$ 34,592	$ 34,062
Recycling	9,366	11,161	17,189	22,845
Byproduct	3,304	4,211	5,921	9,034
Total revenues	30,164	32,833	57,702	65,941
Costs of revenues	22,287	24,707	43,957	48,754
Gross profit	7,877	8,126	13,745	17,187
Selling, general and administrative expenses	7,255	7,296	15,123	14,671
Operating income (loss)	622	830	(1,378)	2,516
Other income (expense):
Interest expense, net	(245)	(228)	(566)	(489)
Other income (expense), net	8	43	(141)	12
Income (loss) before income taxes and noncontrolling interest	385	645	(2,085)	2,039
Provision for (benefit of) income taxes	(101)	302	(586)	831
Net income (loss)	486	343	(1,499)	1,208
Net loss (income) attributable to noncontrolling interest	116	8	401	(129)
Net income (loss) attributable to controlling interest	$ 602	$ 351	$ (1,098)	$ 1,079
Income (loss) per common share:
Basic (in dollars per share)	$ 0.10	$ 0.06	$ (0.19)	$ 0.19
Diluted (in dollars per share)	$ 0.10	$ 0.06	$ (0.19)	$ 0.18
Weighted average common shares outstanding:
Basic (in shares)	5,801	5,581	5,798	5,579
Diluted (in shares)	5,802	5,892	5,798	5,877
Other comprehensive income (loss), net of tax:
Effect of foreign currency translation adjustments	$ (15)	$ 70	$ (133)	$ (11)
Total other comprehensive income (loss), net of tax	(15)	70	(133)	(11)
Comprehensive income (loss)	471	413	(1,632)	1,197
Comprehensive loss (income) attributable to noncontrolling interest	116	8	401	(129)
Comprehensive income (loss) attributable to controlling interest	$ 587	$ 421	$ (1,231)	$ 1,068

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jul. 04, 2015	Jun. 28, 2014
Operating activities
Net income (loss)	$ (1,499)	$ 1,208
Adjustments to reconcile net income (loss) to net cash and cash equivalents (used in) provided by operating activities:
Depreciation and amortization	648	676
Share-based compensation	48	140
Amortization of deferred gain	0	(244)
Amortization of debt issuance costs	54	53
Other	(25)	(289)
Changes in assets and liabilities:
Accounts receivable	(161)	402
Inventories	544	(691)
Other current assets	(225)	(195)
Accounts payable and accrued expenses	1,517	748
Income taxes receivable/payable	(159)	270
Net cash flows provided by operating activities	742	2,078
Investing activities
Purchases of property and equipment	(209)	(216)
Increase in restricted cash	0	500
Proceeds from Sale of Property, Plant, and Equipment	5	12
Payments for (Proceeds from) Other Investing Activities	(46)	0
Net cash flows used in investing activities	(250)	296
Financing activities
Net payments under line of credit	(133)	(1,290)
Payments on debt obligations	(486)	(515)
Proceeds from issuance of debt obligations	356	0
Proceeds from issuance of Common Stock	24	24
Net cash flows used in financing activities	(239)	(1,781)
Effect of changes in exchange rate on cash and cash equivalents	(135)	(7)
Increase (decrease) in cash and cash equivalents	118	586
Cash and cash equivalents at beginning of period	3,523	1,948
Cash and cash equivalents at end of period	3,641	2,534
Supplemental disclosures of cash flow information
Cash payments for interest	355	390
Cash payments (receipts) for income taxes	(403)	910
Non-cash investing and financing activities
Equipment acquired under capital lease and other financing obligations	$ 0	$ 725

Nature of Business and Basis of

Nature of Business and Basis of Presentation	6 Months Ended
	Jul. 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 and six-month periods ended July 4, 2015 and June 28, 2014 , are presented using 13 -week and 26-week periods, respectively. 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 substantial financial support to fund the operations of AAP since its inception.

Inventory

Inventory	6 Months Ended
	Jul. 04, 2015
Inventory Disclosure [Abstract]
Inventory Disclosure [Text Block]	Inventories Inventories, consisting principally of appliances, are stated at the lower of cost, determined on a specific identification basis, or market and consist of: July 4, January 3, Appliances held for resale $ 15,249 $ 15,511 Processed metals from recycled appliances held for resale 289 571 Other 31 31 $ 15,569 $ 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.

Earnings Per Share

Earnings Per Share	6 Months Ended
	Jul. 04, 2015
Earnings Per Share [Abstract]
Earnings Per Share	Earnings per Share Basic income per common share is computed based on the weighted average number of common shares outstanding. Diluted income per common share is computed based on the weighted average number of common shares outstanding adjusted by the number of additional shares that would have been outstanding had the potentially dilutive common shares been issued. Potentially dilutive shares of Common Stock include unexercised stock options and warrants. Basic per share amounts are computed, generally, by dividing net income attributable to controlling interest by the weighted average number of common shares outstanding. Diluted per share amounts assume the conversion, exercise or issuance of all potential Common Stock instruments unless their effect is anti-dilutive, thereby reducing the loss or increasing the income per common share. In calculating diluted weighted average shares and per share amounts, we included stock options and warrants with exercise prices below average market prices, for the respective reporting periods in which they were dilutive, using the treasury stock method. We calculated the number of additional shares by assuming the outstanding stock options were exercised and that the proceeds from such exercises were used to acquire Common Stock at the average market price during the quarter. For the three months and the six months ended July 4, 2015 , we excluded options and warrants to purchase 507 and 717 shares of common stock from the diluted weighted average share outstanding calculation as the effect of these options and warrants were anti-dilutive. For the three months and six months ended June 28, 2014 , we excluded options and warrants to purchase 386 and 375 shares of common stock from the diluted weighted average shares outstanding calculation as the effect of these options were anti-dilutive. A reconciliation of the denominator in the basic and diluted income (loss) per share is as follows: Three Months Ended Six Months Ended July 4, June 28, July 4, June 28, Numerator: Net income (loss) attributable to controlling interest $ 602 $ 351 $ (1,098 ) $ 1,079 Denominator: Weighted average shares outstanding — basic 5,801 5,581 5,798 5,579 Employee stock options 1 111 — 101 Stock warrants — 200 — 197 Weighted average shares outstanding — diluted 5,802 5,892 5,798 5,877 Income (loss) per share: Basic $ 0.10 $ 0.06 $ (0.19 ) $ 0.19 Diluted $ 0.10 $ 0.06 $ (0.19 ) $ 0.18

Share-based Compensation

Share-based Compensation	6 Months Ended
	Jul. 04, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Share-Based Compensation	Share-Based Compensation We recognized share-based compensation expense (benefit) of $(15) and $93 for the three months ended July 4, 2015 , and June 28, 2014 , respectively and $48 and $140 for the six months ended July 4, 2015 and June 28, 2014, respectively. In May 2015, we granted options to purchase 30 shares of common stock at $1.98 per share, vesting in six months and a fair value of $1.66 per share. Based on the value of options outstanding as of July 4, 2015 , estimated future share-based compensation expense is as follows: Balance of fiscal year 2015 90 Fiscal year 2016 106 Fiscal year 2017 44 $ 240 The estimate above does not include any expense for additional options that may be granted and vest during the remainder of 2015, 2016 and 2017.

Product Warranty

Product Warranty	6 Months Ended
	Jul. 04, 2015
Guarantees [Abstract]
Product Warranty	Product Warranty We provide a warranty for the replacement or repair of certain defective units, which varies based on the product sold. Our standard warranty policy requires us to repair or replace certain defective units at no cost to our customers. We estimate the costs that may be incurred under our warranty and record an accrual in the amount of such costs at the time we recognize product revenue. Factors that affect our warranty accrual for covered units include the number of units sold, historical and anticipated rates of warranty claims on these units, and the cost of such claims. We periodically assess the adequacy of our recorded warranty accrual and adjust the amounts as necessary. Changes in our warranty accrual are as follows: Three Months Ended Six Months Ended July 4, June 28, July 4, June 28, Beginning Balance $ 28 $ 30 $ 30 $ 34 Standard accrual based on units sold 13 10 19 16 Actual costs incurred (4 ) (4 ) (8 ) (8 ) Periodic accrual adjustments (4 ) (5 ) (8 ) (11 ) Ending Balance $ 33 $ 31 $ 33 $ 31

Variable Interest Entity

Variable Interest Entity	6 Months Ended
	Jul. 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 substantial 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 July 4, 2015 , and January 3, 2015 : July 4, January 3, Assets Current assets $ 633 $ 912 Property and equipment, net 8,426 8,775 Other assets 142 127 Total Assets $ 9,201 $ 9,814 Liabilities Accounts payable $ 994 $ 923 Accrued expenses 274 199 Current maturities of long-term debt obligations 779 795 Long-term debt obligations, net of current maturities 3,795 3,737 Other liabilities (a) 289 289 Total Liabilities $ 6,131 $ 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 and six months ended July 4, 2015 , and June 28, 2014 : Three Months Ended Six Months Ended July 4, June 28, July 4, June 28, Revenues $ 2,028 $ 2,628 $ 3,878 $ 5,452 Gross profit 297 546 303 1,436 Operating income (loss) (166 ) 51 (682 ) 393 Net income (loss) (230 ) (17 ) (800 ) 257

Other Assets

Other Assets	6 Months Ended
	Jul. 04, 2015
Other Assets, Noncurrent [Abstract]
Other Assets	Other Assets Other assets as of July 4, 2015 , and January 3, 2015 , consist of the following: July 4, January 3, Deposits $ 416 $ 375 Recycling contract, net 60 100 Debt issuance costs, net 120 174 Patent costs 21 21 Goodwill 38 38 Other 95 — $ 750 $ 708 For the three months ended July 4, 2015 , and June 28, 2014 , we recorded amortization expense of $20 and $20 , respectively, related to our recycling contract. For the six months ended July 4, 2015 , and June 28, 2014 , we recorded amortization expense of $40 and $39 , respectively, related to our recycling contract. For the three months ended July 4, 2015 , and June 28, 2014 , we recorded non-cash interest expense of $26 and $26 , respectively, related to debt issuance costs. For the six months ended July 4, 2015 , and June 28, 2014 , we recorded non-cash interest expense of $54 and $53 , respectively, related to debt issuance costs.

Accrued Expenses

Accrued Expenses	6 Months Ended
	Jul. 04, 2015
Payables and Accruals [Abstract]
Accrued Expenses	Accrued Expenses Accrued expenses as of July 4, 2015 , and January 3, 2015 , consist of the following: July 4, January 3, Sales tax estimates, including interest $ 4,813 $ 4,837 Compensation and benefits 1,331 1,322 Accrued incentive and rebate checks 395 381 Accrued rent 252 304 Warranty expense 33 30 Accrued payables 250 306 Deferred revenue 291 276 Other 525 677 $ 7,890 $ 8,133

Line of Credit

Line of Credit	6 Months Ended
	Jul. 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 and July 4, 2015, we were not in compliance with all covenants under the Revolving Credit Agreement. We are working with PNC to obtain an Amended Credit Agreement. There is no assurance that we will obtain such an Amended Credit Agreement. 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 July 4, 2015 , the outstanding line of credit balance was $9,104 with a weighted average interest rate of 3.07% . 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 July 4, 2015 , and January 3, 2015 , our available borrowing capacity under the Revolving Credit Agreement was $5,070 and $4,882 , respectively.

Borrowings

Borrowings	6 Months Ended
	Jul. 04, 2015
Debt Disclosure [Abstract]
Borrowings	Borrowings Long-term debt, capital lease and other financing obligations as of July 4, 2015 , and January 3, 2015 , consist of the following: July 4, January 3, PNC term loan $ 1,403 $ 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 332 348 Capital leases and other financing obligations 1,149 1,062 6,126 6,256 Less current maturities 2,254 1,138 $ 3,872 $ 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 July 4, 2015 , and January 3, 2015 , the weighted average interest rate was 3.44% 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 July 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 July 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 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 was repaid in full by AAP. The remaining note totaling $200 is expected to be repaid with the revenues expected during the fourth quarter of 2015 from the disposal of refrigerants through carbon offset programs. 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 July 4, 2015 , and January 3, 2015 . Accumulated amortization as of July 4, 2015 , and January 3, 2015 , was approximately $1,609 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	6 Months Ended
	Jul. 04, 2015
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 $4.0 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. 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	6 Months Ended
	Jul. 04, 2015
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes Our overall effective tax rate, based on projected full-year taxable income, was (26.2)% and 46.8% for the three months ended July 4, 2015 and June 28, 2014 , respectively. Our overall effective tax rate, based on projected full-year taxable income, was (28.1)% and 40.8% for the six months ended July 4, 2015 and June 28, 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, share-based compensation and the book income (loss) of consolidated AAP attributable to noncontrolling interest. 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 July 4, 2015 .

Segment Information

Segment Information	6 Months Ended
	Jul. 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 Six Months Ended July 4, June 28, July 4, June 28, Revenues: Retail $ 17,713 $ 17,692 $ 34,933 $ 34,629 Recycling 12,451 15,141 22,769 31,312 Total revenues $ 30,164 $ 32,833 $ 57,702 $ 65,941 Operating income (loss): Retail $ (20 ) $ (43 ) $ (636 ) $ 60 Recycling 820 1,024 (357 ) 2,767 Unallocated corporate (178 ) (151 ) (385 ) (311 ) Total operating income (loss) $ 622 $ 830 $ (1,378 ) $ 2,516 Cash capital expenditures: Retail $ 9 $ 3 $ 38 $ 3 Recycling 32 80 47 84 Corporate assets not allocable 86 77 124 129 Total cash capital expenditures $ 127 $ 160 $ 209 $ 216 Depreciation and amortization: Retail $ 47 $ 40 $ 96 $ 83 Recycling 217 220 436 430 Unallocated corporate 54 82 116 163 Total depreciation and amortization $ 318 $ 342 $ 648 $ 676 Interest expense: Retail $ 60 $ 60 $ 114 $ 125 Recycling 130 112 329 224 Unallocated corporate 56 56 124 140 Total interest expense $ 246 $ 228 $ 567 $ 489 As of July 4, June 28, Assets: Retail $ 17,414 $ 27,955 Recycling 21,387 14,614 Corporate assets not allocable 7,851 4,535 Total assets $ 46,652 $ 47,104

Recent Accounting Pronouncement

Recent Accounting Pronouncements (Notes)	6 Months Ended
	Jul. 04, 2015
Accounting Policies [Abstract]
Recent Accounting Pronouncements	Recent Accounting Pronouncements N ew A ccounting S tandards 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 2018, and interim periods within that year. We will adopt the new provisions of this accounting standard at the beginning of fiscal year 2018, 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 July 4, 2015, we had $0.1 million of unamortized debt issuance costs. This amount is recorded in other non-current assets on the consolidated balance sheets. In July 2015, FASB issued ASU 2015-11, Inventory (Topic 330) Related to Simplifying the Measurement of Inventory applies to all inventory except that which is measured using last-in, first-out (LIFO) or the retail inventory method. Inventory measured using first-in, first-out (FIFO) or average cost is included in the new amendments. Inventory within the scope of the new guidance should be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. The amendments will take effect for public business entities for fiscal years beginning after Dec. 15, 2016, including interim periods within those fiscal years. The new guidance should be applied prospectively, and earlier application is permitted as of the beginning of an interim or annual reporting period. We are evaluating the impact of the standard on the consolidated financial statements.

Recent Accounting Pronounceme20

Recent Accounting Pronouncements (Policies)	6 Months Ended
	Jul. 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 and six-month periods ended July 4, 2015 and June 28, 2014 , are presented using 13 -week and 26-week periods, respectively. 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 substantial financial support to fund the operations of AAP since its inception.
New Accounting Standards Not Yet Effective	N ew A ccounting S tandards 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 2018, and interim periods within that year. We will adopt the new provisions of this accounting standard at the beginning of fiscal year 2018, 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 July 4, 2015, we had $0.1 million of unamortized debt issuance costs. This amount is recorded in other non-current assets on the consolidated balance sheets. In July 2015, FASB issued ASU 2015-11, Inventory (Topic 330) Related to Simplifying the Measurement of Inventory applies to all inventory except that which is measured using last-in, first-out (LIFO) or the retail inventory method. Inventory measured using first-in, first-out (FIFO) or average cost is included in the new amendments. Inventory within the scope of the new guidance should be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. The amendments will take effect for public business entities for fiscal years beginning after Dec. 15, 2016, including interim periods within those fiscal years. The new guidance should be applied prospectively, and earlier application is permitted as of the beginning of an interim or annual reporting period. We are evaluating the impact of the standard on the consolidated financial statements.

Inventory (Tables)

Inventory (Tables)	6 Months Ended
	Jul. 04, 2015
Inventory Disclosure [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: July 4, January 3, Appliances held for resale $ 15,249 $ 15,511 Processed metals from recycled appliances held for resale 289 571 Other 31 31 $ 15,569 $ 16,113

Earnings Per Share (Tables)

Earnings Per Share (Tables)	6 Months Ended
	Jul. 04, 2015
Earnings Per Share [Abstract]
Schedule of reconciliation of the denominator in the basic and diluted income or loss per share	A reconciliation of the denominator in the basic and diluted income (loss) per share is as follows: Three Months Ended Six Months Ended July 4, June 28, July 4, June 28, Numerator: Net income (loss) attributable to controlling interest $ 602 $ 351 $ (1,098 ) $ 1,079 Denominator: Weighted average shares outstanding — basic 5,801 5,581 5,798 5,579 Employee stock options 1 111 — 101 Stock warrants — 200 — 197 Weighted average shares outstanding — diluted 5,802 5,892 5,798 5,877 Income (loss) per share: Basic $ 0.10 $ 0.06 $ (0.19 ) $ 0.19 Diluted $ 0.10 $ 0.06 $ (0.19 ) $ 0.18

Share-based Compensation (Table

Share-based Compensation (Tables)	6 Months Ended
	Jul. 04, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan	Based on the value of options outstanding as of July 4, 2015 , estimated future share-based compensation expense is as follows: Balance of fiscal year 2015 90 Fiscal year 2016 106 Fiscal year 2017 44 $ 240

Product Warranty (Tables)

Product Warranty (Tables)	6 Months Ended
	Jul. 04, 2015
Guarantees [Abstract]
Schedule of warranty accrual	Changes in our warranty accrual are as follows: Three Months Ended Six Months Ended July 4, June 28, July 4, June 28, Beginning Balance $ 28 $ 30 $ 30 $ 34 Standard accrual based on units sold 13 10 19 16 Actual costs incurred (4 ) (4 ) (8 ) (8 ) Periodic accrual adjustments (4 ) (5 ) (8 ) (11 ) Ending Balance $ 33 $ 31 $ 33 $ 31

Variable Interest Entity (Table

Variable Interest Entity (Tables)	6 Months Ended
	Jul. 04, 2015
Variable Interest Entity
Summary of assets and liabilities	The following table summarizes the assets and liabilities of AAP as of July 4, 2015 , and January 3, 2015 : July 4, January 3, Assets Current assets $ 633 $ 912 Property and equipment, net 8,426 8,775 Other assets 142 127 Total Assets $ 9,201 $ 9,814 Liabilities Accounts payable $ 994 $ 923 Accrued expenses 274 199 Current maturities of long-term debt obligations 779 795 Long-term debt obligations, net of current maturities 3,795 3,737 Other liabilities (a) 289 289 Total Liabilities $ 6,131 $ 5,943
Summary of operating results	The following table summarizes the operating results of AAP for the three months and six months ended July 4, 2015 , and June 28, 2014 : Three Months Ended Six Months Ended July 4, June 28, July 4, June 28, Revenues $ 2,028 $ 2,628 $ 3,878 $ 5,452 Gross profit 297 546 303 1,436 Operating income (loss) (166 ) 51 (682 ) 393 Net income (loss) (230 ) (17 ) (800 ) 257

Other Assets (Tables)

Other Assets (Tables)	6 Months Ended
	Jul. 04, 2015
Other Assets, Noncurrent [Abstract]
Schedule of other assets	Other assets as of July 4, 2015 , and January 3, 2015 , consist of the following: July 4, January 3, Deposits $ 416 $ 375 Recycling contract, net 60 100 Debt issuance costs, net 120 174 Patent costs 21 21 Goodwill 38 38 Other 95 — $ 750 $ 708

Accrued Expenses (Tables)

Accrued Expenses (Tables)	6 Months Ended
	Jul. 04, 2015
Payables and Accruals [Abstract]
Schedule of accrued expenses	Accrued expenses as of July 4, 2015 , and January 3, 2015 , consist of the following: July 4, January 3, Sales tax estimates, including interest $ 4,813 $ 4,837 Compensation and benefits 1,331 1,322 Accrued incentive and rebate checks 395 381 Accrued rent 252 304 Warranty expense 33 30 Accrued payables 250 306 Deferred revenue 291 276 Other 525 677 $ 7,890 $ 8,133

Borrowings (Tables)

Borrowings (Tables)	6 Months Ended
	Jul. 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 July 4, 2015 , and January 3, 2015 , consist of the following: July 4, January 3, PNC term loan $ 1,403 $ 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 332 348 Capital leases and other financing obligations 1,149 1,062 6,126 6,256 Less current maturities 2,254 1,138 $ 3,872 $ 5,118

Segment Information (Tables)

Segment Information (Tables)	6 Months Ended
	Jul. 04, 2015
Segment Reporting [Abstract]
Schedule of segment information	The following tables present our segment information for periods indicated: Three Months Ended Six Months Ended July 4, June 28, July 4, June 28, Revenues: Retail $ 17,713 $ 17,692 $ 34,933 $ 34,629 Recycling 12,451 15,141 22,769 31,312 Total revenues $ 30,164 $ 32,833 $ 57,702 $ 65,941 Operating income (loss): Retail $ (20 ) $ (43 ) $ (636 ) $ 60 Recycling 820 1,024 (357 ) 2,767 Unallocated corporate (178 ) (151 ) (385 ) (311 ) Total operating income (loss) $ 622 $ 830 $ (1,378 ) $ 2,516 Cash capital expenditures: Retail $ 9 $ 3 $ 38 $ 3 Recycling 32 80 47 84 Corporate assets not allocable 86 77 124 129 Total cash capital expenditures $ 127 $ 160 $ 209 $ 216 Depreciation and amortization: Retail $ 47 $ 40 $ 96 $ 83 Recycling 217 220 436 430 Unallocated corporate 54 82 116 163 Total depreciation and amortization $ 318 $ 342 $ 648 $ 676 Interest expense: Retail $ 60 $ 60 $ 114 $ 125 Recycling 130 112 329 224 Unallocated corporate 56 56 124 140 Total interest expense $ 246 $ 228 $ 567 $ 489 As of July 4, June 28, Assets: Retail $ 17,414 $ 27,955 Recycling 21,387 14,614 Corporate assets not allocable 7,851 4,535 Total assets $ 46,652 $ 47,104

Nature of Business and Basis 30

Nature of Business and Basis of Presentation (Details) - Jul. 04, 2015	W	W
Nature of Business and Basis of Presentation
Interest in a joint venture (as a percent)	50.00%	50.00%
Number of States in which Entity Operates	23	23
Number of weeks reflected in operating results	13	13
Term of contractual agreement between GE and the entity		6 years
4,301
Nature of Business and Basis of Presentation
Interest in a joint venture (as a percent)	50.00%	50.00%

Inventory (Details)

Inventory (Details) - USD ($) $ in Thousands	Jul. 04, 2015	Jan. 03, 2015
Inventory Disclosure [Abstract]
Appliances held for resale	$ 15,249	$ 15,511
Processed metals from recycled appliances held for resale	289	571
Other	31	31
Inventory, Net	$ 15,569	$ 16,113

Earnings Per Share (Details)

Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 04, 2015	Jun. 28, 2014	Jul. 04, 2015	Jun. 28, 2014
Earnings Per Share [Abstract]
Options and warrants excluded from computation of earnings per share (in shares)	507	386	1	0
Net income (loss) attributable to controlling interest	$ 602	$ 351	$ (1,098)	$ 1,079
Basic (in shares)	5,801	5,581	5,798	5,579
Employee stock options (in shares)	1	111	0	101
Stock warrants (in shares)	0	200	0	197
Weighted average shares outstanding - diluted (in shares)	5,802	5,892	5,798	5,877
Basic (in dollars per share)	$ 0.10	$ 0.06	$ (0.19)	$ 0.19
Diluted (in dollars per share)	$ 0.10	$ 0.06	$ (0.19)	$ 0.18

Share-based Compensation (Detai

Share-based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended		6 Months Ended
	May. 30, 2015	Jul. 04, 2015	Jun. 28, 2014	Jul. 04, 2015	Jun. 28, 2014	May. 30, 2012
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Share-based compensation expense recognized		$ (15)	$ 93	$ 48	$ 140
Options granted in the period	30
Exercise price of shares (usd per share)						$ 1.98
Fair value of options granted in period (usd per share)	$ 1.66
Vesting period	6 months
Fiscal year 2015		90		90
Fiscal year 2016		106		106
Fiscal year 2017		44		44
Total		$ 240		$ 240

Product Warranty (Details)

Product Warranty (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 04, 2015	Jun. 28, 2014	Jul. 04, 2015	Jun. 28, 2014
Guarantees [Abstract]
Beginning Balance	$ 28	$ 30	$ 30	$ 34
Standard accrual based on units sold	13	10	19	16
Actual costs incurred	(4)	(4)	(8)	(8)
Periodic accrual adjustments	(4)	(5)	(8)	(11)
Ending Balance	$ 33	$ 31	$ 33	$ 31

Variable Interest Entity (Detai

Variable Interest Entity (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 04, 2015	Jun. 28, 2014	Jul. 04, 2015	Jun. 28, 2014	Jan. 03, 2015
Variable Interest Entity, Classification of Carrying Amount, Assets
Current assets	$ 34,527		$ 34,527		$ 34,477
Property and equipment, net	11,361		11,361		11,761
Other assets	750		750		708
Total	9,201		9,201		9,814
Liabilities
Accounts payable	8,261		8,261		6,380
Accrued expenses	7,890		7,890		8,133
Current maturities of long-term debt obligations	2,254		2,254		1,138
Long-term obligations, less current maturities	3,872		3,872		5,118
Other Liabilities, Noncurrent	246		246		369
Liabilities of the consolidated variable interest entity	2,600		2,600		2,338
Operating results of AAP
Revenues	30,164	$ 32,833	57,702	$ 65,941
Gross profit (loss)	7,877	8,126	13,745	17,187
Operating income (loss)	622	830	(1,378)	2,516
Net income (loss)	486	343	(1,499)	1,208
AAP
Variable Interest Entity, Classification of Carrying Amount, Assets
Current assets	633		633		912
Property and equipment, net	8,426		8,426		8,775
Other assets	142		142		127
Total	9,201		9,201		9,814
Liabilities
Accounts payable	994		994		923
Accrued expenses	274		274		199
Current maturities of long-term debt obligations	779		779		795
Long-term obligations, less current maturities	3,795		3,795		3,737
Other Liabilities, Noncurrent	289		289		289
Liabilities of the consolidated variable interest entity	6,131		6,131		$ 5,943
Operating results of AAP
Revenues	2,028	2,628	3,878	5,452
Gross profit (loss)	297	546	303	1,436
Operating income (loss)	(166)	51	(682)	393
Net income (loss)	$ (230)	$ (17)	$ (800)	$ 257

Other Assets (Details)

Other Assets (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 04, 2015	Jun. 28, 2014	Jul. 04, 2015	Jun. 28, 2014	Jan. 03, 2015
Other Assets, Noncurrent [Abstract]
Goodwill	$ 38		$ 38		$ 38
Other Assets, Miscellaneous, Noncurrent	95		95		0
Deposits	416		416		375
Recycling contract, net	60		60		100
Debt issuance costs, net	120		120		174
Patent costs	21		21		21
Total	750		750		$ 708
Amortization expense related to recycling contract	20	$ 20	40	$ 39
Non-cash interest expense related to debt issuance costs	$ 26	$ 26	$ 54	$ 53

Accrued Expenses (Details)

Accrued Expenses (Details) - USD ($) $ in Thousands	Jul. 04, 2015	Jan. 03, 2015
Payables and Accruals [Abstract]
Sales and Excise Tax Payable	$ 4,813	$ 4,837
Compensation and benefits	1,331	1,322
Accrued incentive and rebate checks	395	381
Accrued rent	252	304
Accrued payables	250	306
Deferred revenue	291	276
Other	525	677
Total	$ 7,890	$ 8,133

Line of Credit (Details)

Line of Credit (Details)	6 Months Ended
	Jul. 04, 2015USD ($)	Jan. 03, 2015USD ($)
Line of Credit
Interest rate on the revolving line of credit	one-month LIBOR rate
Outstanding balance under the Revolving Credit Agreement	$ 9,104,000	$ 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	1.10
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	$ 9,104,000	$ 9,237,000
Weighted average interest rate (as a percent)	3.07%	3.30%
Available borrowing capacity under the Revolving Credit Agreement	$ 5,070,000	$ 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

Borrowings (Details)

Borrowings (Details)	1 Months Ended			6 Months Ended
	Mar. 30, 2011USD ($)loan	Feb. 28, 2011USD ($)payment	Jan. 30, 2011USD ($)	Jul. 04, 2015USD ($)	Apr. 04, 2015USD ($)	Jan. 03, 2015USD ($)
Borrowings
Long-term debt, capital lease and other financing obligations				$ 6,126,000		$ 6,256,000
Less current maturities				2,254,000		1,138,000
Long-term debt, capital lease and other financing obligations, less current maturities				$ 3,872,000		5,118,000
Interest rate				one-month LIBOR rate
AAP
Borrowings
Less current maturities				$ 779,000		795,000
Long-term debt, capital lease and other financing obligations, less current maturities				3,795,000		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				1,403,000		$ 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 | payment		119
Interest rate at the end of the period (as a percent)				3.44%		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 | loan	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				$ 332,000		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				1,149,000		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				$ 1,609,000		$ 1,588,000

Commitments and Contingencies (

Commitments and Contingencies (Details) $ in Millions	6 Months Ended	12 Months Ended
	Jul. 04, 2015USD ($)statemanufacturer	Jan. 03, 2015USD ($)
Loss Contingencies [Line Items]
Number of appliance manufacturers that have material contracts with the Company | manufacturer	3
Number of States in which Entity Operates	12
Sales Tax Error Correction [Member]
Loss Contingencies [Line Items]
Error Corrections and Prior Period Adjustments, Sales Tax Estimate	$ 4
Error Corrections and Prior Period Adjustments, Sales Tax Estimate, Net		$ 2.4

Income Taxes (Details)

Income Taxes (Details)	3 Months Ended		6 Months Ended
	Jul. 04, 2015	Jun. 28, 2014	Jul. 04, 2015	Jun. 28, 2014
Income Tax Disclosure [Abstract]
Effective tax rate	(26.20%)	46.80%	(28.10%)	40.80%
Statutory rate			34.00%

Segment Information (Details)

Segment Information (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 04, 2015USD ($)	Jun. 28, 2014USD ($)	Jul. 04, 2015USD ($)segment	Jun. 28, 2014USD ($)	Jan. 03, 2015USD ($)
Segment Information
Revenues	$ 30,164	$ 32,833	$ 57,702	$ 65,941
Operating income (loss)	622	830	(1,378)	2,516
Assets	46,652	47,104	46,652	47,104	$ 46,960
Cash capital expenditures	127	160	209	216
Depreciation and amortization	318	342	648	676
Interest Expense	245	228	566	489
Interest Expense	(246)	(228)	$ (567)	(489)
Number of reportable segments | segment			2
Retail
Segment Information
Revenues	17,713	17,692	$ 34,933	34,629
Operating income (loss)	(20)	(43)	(636)	60
Assets	17,414	27,955	17,414	27,955
Cash capital expenditures	9	3	38	3
Depreciation and amortization	47	40	96	83
Interest Expense	60	60	114	125
Recycling
Segment Information
Revenues	12,451	15,141	22,769	31,312
Operating income (loss)	820	1,024	(357)	2,767
Assets	21,387	14,614	21,387	14,614
Cash capital expenditures	32	80	47	84
Depreciation and amortization	217	220	436	430
Interest Expense	130	112	329	224
Unallocated corporate
Segment Information
Operating income (loss)	(178)	(151)	(385)	(311)
Assets	7,851	4,535	7,851	4,535
Cash capital expenditures	86	77	124	129
Depreciation and amortization	54	82	116	163
Interest Expense	$ 56	$ 56	$ 124	$ 140

Recent Accounting Pronounceme43

Recent Accounting Pronouncements (Details) $ in Millions	Jul. 04, 2015USD ($)
Accounting Policies [Abstract]
Unamortized debt issuance costs	$ 0.1