ALT5 Sigma (ALTS) 10-Q 17 May 16 2016 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Apr. 02, 2016	May. 09, 2016
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	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Document Type	10-Q
Document Period End Date	Apr. 2, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Common Stock, Shares Outstanding		5,900,818

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Apr. 02, 2016	Jan. 02, 2016
Current assets:
Cash and cash equivalents	$ 2,323	$ 1,969
Accounts receivable, net of allowance of $97 and $73, respectively	11,006	11,536
Inventories	15,277	16,733
Income taxes receivable	1,441	1,126
Other current assets	1,081	1,350
Deferred income tax assets	1,657	1,657
Total current assets	32,785	34,371
Property and equipment, net	10,817	10,985
Restricted Cash and Cash Equivalents	500	500
Other assets	585	596
Deferred income tax assets	327	327
Total assets	45,014	46,779
Current liabilities:
Accounts payable	6,726	7,019
Accrued expenses	9,868	8,934
Line of credit	10,412	12,668
Current maturities of long-term obligations	2,732	1,251
Total current liabilities	29,738	29,872
Long-term obligations, less current maturities	3,463	4,506
Other Liabilities, Noncurrent	342	357
Total liabilities	$ 33,543	$ 34,735
Commitments and contingencies
Shareholders' equity:
Common Stock, no par value; 10,000 shares authorized; issued and outstanding: 5,901 shares	$ 21,504	$ 21,466
Accumulated deficit	(10,028)	(9,577)
Accumulated other comprehensive loss	(546)	(565)
Total shareholders’ equity	10,930	11,324
Noncontrolling interest	541	720
Total equity	11,471	12,044
Total liabilities and shareholders’ equity	$ 45,014	$ 46,779

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Apr. 02, 2016	Jan. 02, 2016
Statement of Financial Position [Abstract]
Accounts receivable, allowance	$ 97	$ 73
Inventories, reserves	$ 0	$ 0
Common Stock, shares authorized (in shares)	10,000	10,000
Common Stock, issued shares (in shares)	5,901	5,901
Common Stock, outstanding shares (in shares)	5,901	5,901
Assets of the consolidated variable interest entity	$ 9,263	$ 8,856
Liabilities of the consolidated variable interest entity	$ 3,668	$ 2,838

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Apr. 02, 2016	Apr. 04, 2015
Revenues:
Retail	$ 16,570	$ 17,098
Recycling	6,936	7,823
Byproduct	1,839	2,617
Total revenues	25,345	27,538
Costs of revenues	19,154	21,670
Gross profit	6,191	5,868
Selling, general and administrative expenses	6,978	7,868
Operating loss	(787)	(2,000)
Other income (expense):
Interest expense, net	(283)	(321)
Other income (expense), net	120	(149)
Loss before income taxes and noncontrolling interest	(950)	(2,470)
Benefit from income taxes	(320)	(485)
Net Loss	(630)	(1,985)
Net loss attributable to noncontrolling interest	179	285
Net loss attributable to controlling interest	$ (451)	$ (1,700)
Loss per common share:
Basic (in dollars per share)	$ (0.08)	$ (0.29)
Diluted (in dollars per share)	$ (0.08)	$ (0.29)
Weighted average common shares outstanding:
Basic (in shares)	5,901	5,795
Diluted (in shares)	5,901	5,795
Other comprehensive income (loss), net of tax:
Effect of foreign currency translation adjustments	$ 19	$ (118)
Total other comprehensive income (loss), net of tax	19	(118)
Comprehensive loss	(611)	(2,103)
Comprehensive loss attributable to noncontrolling interest	179	285
Comprehensive loss attributable to controlling interest	$ (432)	$ (1,818)

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Apr. 02, 2016	Apr. 04, 2015
Operating activities
Net income (loss)	$ (630)	$ (1,985)
Adjustments to reconcile net income (loss) to net cash and cash equivalents (used in) provided by operating activities:
Depreciation and amortization	325	330
Share-based compensation	38	63
Amortization of debt issuance costs	42	28
Other	0	(5)
Changes in assets and liabilities:
Accounts receivable	530	1,537
Inventories	1,456	68
Other current assets	(153)	182
Accounts payable and accrued expenses	1,610	1,322
Income taxes receivable/payable	(303)	(470)
Net cash flows provided by operating activities	2,915	1,070
Investing activities
Purchases of property and equipment	(137)	(82)
Proceeds from Sale of Property, Plant, and Equipment	0	5
Payments for (Proceeds from) Other Investing Activities	(4)	0
Net cash flows used in investing activities	(141)	(77)
Financing activities
Net proceeds (payments) under line of credit	(2,256)	(967)
Payments on debt obligations	(138)	(220)
Proceeds from issuance of debt obligations	100	325
Proceeds from issuance of Common Stock	0	24
Payments of Debt Issuance Costs	125	0
Net cash flows used in financing activities	(2,419)	(838)
Effect of changes in exchange rate on cash and cash equivalents	(1)	(120)
Increase (decrease) in cash and cash equivalents	354	35
Cash and cash equivalents at beginning of period	1,969	3,523
Cash and cash equivalents at end of period	2,323	3,558
Supplemental disclosures of cash flow information
Cash payments for interest	213	165
Cash payments (receipts) for income taxes	(5)	8
Non-cash investing and financing activities
Repayments of Long-term Debt	$ 63	$ 0

Nature of Business and Basis of

Nature of Business and Basis of Presentation	3 Months Ended
	Apr. 02, 2016
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 2, 2016, 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 2, 2016 and April 4, 2015 , 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 2, 2016 , included in the Company’s Annual Report on Form 10-K filed with the SEC on April 4, 2016 . 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. Brian Conners, a member of the ARCA Board of Directors, has a controlling interest in 4301. 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. The term of the agreement with GE was extended via amendments through May 31, 2016. 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. The Company is in the process of negotiating a new agreement with GE, which it expects to be concluded and effective June 1, 2016.

Inventory

Inventory	3 Months Ended
	Apr. 02, 2016
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: April 2, January 2, Appliances held for resale $ 15,114 $ 16,360 Processed metals from recycled appliances held for resale 157 367 Other 6 6 $ 15,277 $ 16,733 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	3 Months Ended
	Apr. 02, 2016
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 ended April 2, 2016 , we excluded options and warrants to purchase 803 shares of common stock from the diluted weighted average share outstanding calculation as the effect of these options and warrants was anti-dilutive. For the three months ended April 4, 2015 , we excluded options and warrants to purchase 783 shares of common stock from the diluted weighted average shares outstanding calculation as the effect of these options was anti-dilutive.

Share-based Compensation

Share-based Compensation	3 Months Ended
	Apr. 02, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Share-Based Compensation	Share-Based Compensation We recognized share-based compensation expense of $38 and $63 for the three months ended April 2, 2016 , and April 4, 2015 , respectively. Based on the value of options outstanding as of April 2, 2016 , estimated future share-based compensation expense is as follows: Balance of fiscal year 2016 $ 99 Fiscal year 2017 44 $ 143 The estimate above does not include any expense for additional options that may be granted and vest during the remainder of 2016 and 2017.

Product Warranty

Product Warranty	3 Months Ended
	Apr. 02, 2016
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 April 2, April 4, Beginning Balance $ 42 $ 30 Standard accrual based on units sold 6 6 Actual costs incurred (4 ) (4 ) Periodic accrual adjustments (5 ) (4 ) Ending Balance $ 39 $ 28

Variable Interest Entity

Variable Interest Entity	3 Months Ended
	Apr. 02, 2016
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 April 2, 2016 , and January 2, 2016 : April 2, January 2, Assets Current assets $ 1,289 $ 696 Property and equipment, net 7,891 8,077 Other assets 83 83 Total Assets $ 9,263 $ 8,856 Liabilities Accounts payable (a) $ 1,831 $ 1,872 Accrued expenses 1,199 399 Current maturities of long-term debt obligations 1,048 946 Long-term debt obligations, net of current maturities 3,390 3,439 Other liabilities (b) 712 759 Total Liabilities $ 8,180 $ 7,415 (a) As of April 2, 2016, AAP has $299 in advances payable to 4301 included in accounts payable. (b) Other liabilities represent loans and advances between ARCA and AAP that are eliminated in consolidation. In April 2016, an officer of the Company loaned $75 to AAP, through the issuance of an 8% promissory note. The note is expected to be repaid with the collection of the carbon offset program revenues in May 2016. The following table summarizes the operating results of AAP for the three months ended April 2, 2016 , and April 4, 2015 : Three Months Ended April 2, April 4, Revenues $ 1,715 $ 1,850 Gross profit 152 6 Operating loss (274 ) (516 ) Net loss (358 ) (570 )

Other Assets

Other Assets	3 Months Ended
	Apr. 02, 2016
Other Assets, Noncurrent [Abstract]
Other Assets	Other Assets Other assets as of April 2, 2016 , and January 2, 2016 , consist of the following: April 2, January 2, Deposits $ 424 $ 416 Other 123 142 Goodwill 38 38 $ 585 $ 596 For the three months ended April 2, 2016 , and April 4, 2015 , we recorded amortization expense of $20 and $20 , respectively, related to our recycling contract. For the three months ended April 2, 2016 , and April 4, 2015 , we recorded non-cash interest expense of $42 and $28 , respectively, related to debt issuance costs.

Accrued Expenses

Accrued Expenses	3 Months Ended
	Apr. 02, 2016
Payables and Accruals [Abstract]
Accrued Expenses	Accrued Expenses Accrued expenses as of April 2, 2016 , and January 2, 2016 , consist of the following: April 2, January 2, Sales tax estimates, including interest $ 4,764 $ 4,804 Compensation and benefits 1,306 1,446 Accrued incentive and rebate checks 282 293 Accrued rent 217 235 Warranty expense 39 42 Accrued payables 247 749 Deferred revenue 2,114 413 Other 899 952 $ 9,868 $ 8,934 In March 2016, we sold our interest in certain Registry Offset Credits that were approved by the Climate Action Reserve in March 2016 in our carbon offset program for $1,878 . The revenue associated with this transaction and the $165 related costs have been deferred. We expect the revenue associated with this transaction and the related costs will be recognized in the second quarter of 2016.

Line of Credit

Line of Credit	3 Months Ended
	Apr. 02, 2016
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 had a stated maturity date of January 24, 2016, and was renewed on January 22, 2016. Our financial covenants were reset in connection with this renewal. The renewed Revolving Credit Agreement has a stated maturity of January 31, 2017, 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 April 2, 2016, that we meet a minimum earnings before interest, taxes, depreciation and amortization, and continuing at the end of each quarter thereafter, that we meet a minimum fixed charge coverage ratio of 1.1 to 1.0. 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. In the January 22, 2016 renewal, the affiliate loan balance is capped at $1,000 on December 31, 2015, and thereafter. As of April 2, 2016, we were in compliance with all the covenants of the Revolving Credit Agreement. As of January 2, 2016 , we were not in compliance with all covenants under the Revolving Credit Agreement which were subsequently waived with the January 22, 2016 renewal. The interest rate on the Revolving Credit Agreement, in our renewal agreement on January 22, 2016, is PNC Base Rate plus 1.75% to 3.25% , or 1-, 2- or 3-month PNC LIBOR Rate plus 2.75% to 4.25% , with the rate being dependent on our level of fixed charge coverage. 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 as 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 2, 2016 , the outstanding line of credit balance was $10,412 with a weighted average interest rate of 4.81% , which included both PNC LIBOR and PNC Base Rate loans. As of January 2, 2016 , the outstanding line of credit balance was $12,668 with a weighted average interest rate of 7.25% , which was the PNC Base Rate plus a default premium. 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 2, 2016 , and January 2, 2016 , our available borrowing capacity under the Revolving Credit Agreement was $1,564 and $1,382 , respectively.

Borrowings

Borrowings	3 Months Ended
	Apr. 02, 2016
Debt Disclosure [Abstract]
Borrowings	Borrowings Long-term debt, capital lease and other financing obligations as of April 2, 2016 , and January 2, 2016 , consist of the following: April 2, January 2, PNC term loan $ 1,211 $ 1,275 Susquehanna term loans 3,242 3,242 2.75% note, due in monthly installments of $3, including interest, due October 2024, collateralized by equipment 311 319 Capital leases and other financing obligations 1,644 988 Debt issuance costs, net (213 ) (67 ) 6,195 5,757 Less current maturities 2,732 1,251 $ 3,463 $ 4,506 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 120 th payment of all unpaid principal, interest and fees on February 1, 2021. If the Revolving Credit Agreement is not renewed, a balloon payment of $1,020 in principal plus interest and additional fees will be due on January 31, 2017. The Term Loan is collateralized with our California facility located in Compton, California. The Term Loan interest rate is PNC Base Rate plus 2.25% to 3.75% , or 1-, 2- or 3-month PNC LIBOR Rate plus 3.25% to 4.75% , with the rate being dependent on our level of fixed charge coverage. The interest rate will be fixed for the first half of 2016 at PNC Base Rate plus 3.75% , or 1-,2- or 3-month PNC LIBOR Rate plus 4.75% . As of April 2, 2016, the weighted average interest rate was 5.21% . As of January 2, 2016 , the weighted average interest rate was 7.75% , which was the PNC Base Rate plus a default rate premium. As of April 2, 2016, the balance due on the Term Loan is classified as current as the maturity of our credit facility is January 31, 2017. 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 2, 2016 , and January 2, 2016 , 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 March of 2015, an entity controlled by one of 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. In February 2016, an entity controlled by one of the noncontrolling interest holders of AAP loaned AAP $100 through the issuance of an 8% promissory note. The remaining notes totaling $300 are expected to be repaid with the collection of the carbon offset program revenues by the end of the second quarter of 2016. Capital leases and other financing obligations : We acquire certain equipment under capital leases and other financing obligations. The cost of the equipment was $2,607 and $2,667 as of April 2, 2016 , and January 2, 2016 , respectively. Accumulated amortization as of April 2, 2016 , and January 2, 2016 , was approximately $1,693 and $1,635 , respectively. Depreciation and amortization expense is included in cost of revenues and selling, general and administrative expenses.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Apr. 02, 2016
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 : On March 6, 2015, a complaint was filed in United States District Court for the Central District of California by Jason Feola, individually and as a representative of a putative class consisting of purchasers of the Company’s common stock between March 15, 2012 and February 11, 2015, against Appliance Recycling Centers of America, Inc. and certain current and former officers of the Company. Mr. Feola, pursuant to terms of his retainer agreement with The Rosen Law Firm, certified that he purchased 240 shares of the Company’s common stock for approximately $1 in total consideration. On May 7, 2015, the Company and the individual defendants were served the complaint. In July 2015, the Company and the individual defendants received an amended complaint. The complaint alleges that misstatements and omissions occurred in press releases and filings by the Company with the Securities and Exchange Commission and that these misstatements or omissions constitute violations of Section 20 (a) and Section 10(b) of, and Rule 10b-5 under, the Securities Exchange Act of 1934. In October 2015, the court held a hearing on the Company's motion to dismiss the complaint. On November 24, 2015, the United States District Court for the Central District of California entered an order granting the motion to dismiss the amended complaint. The Court’s order provided that the dismissal was without prejudice and that the plaintiffs may file an amended complaint within 21 days of the issuance of the order. On December 15, 2015, the Company and the individual defendants were served with a second amended complaint. In May 2016, the court held a hearing on the Company's motion to dismiss the second amended complaint. We are currently awaiting the United States District Court for the Central District of California's ruling on our motion to dismiss the second amended complaint. This matter has been forwarded to our insurance carriers and we intend to contest vigorously the claims made in the complaint. On November 6, 2015, a complaint was filed in the Minnesota District Court for Hennepin County, Minnesota, by David Gray and Michael Boller, purporting to bring suit derivatively and on behalf of the Company against twelve current and former officers and directors of the Company. The complaint alleges that the defendants breached their fiduciary duties based on substantially similar allegations to those asserted in Mr. Feola's putative securities class action complaint, and that the defendants have been unjustly enriched as a result thereof. The complaint seeks damages, disgorgement, an award of attorneys’ fees and other expenses, and an order compelling changes to the Company’s corporate governance and internal procedures. This matter has been stayed by the court, pursuant to a stipulation of the parties, until the United States District Court for the Central District of California determines the legal sufficiency of Mr. Feola's complaint or other specified developments occur in that case. This matter has been submitted to our insurance carriers. Given the uncertainty of litigation and the preliminary stage of these cases, we cannot reasonably estimate the possible loss or range of loss that may result from these actions. The Company maintains liability insurance policies that may reduce the Company’s exposure, if any. In February 2012, various individuals commenced a class action lawsuit against Whirlpool Corporation (“Whirlpool”) and various distributors of Whirlpool products, including Sears, The Home Depot, Lowe’s and us, alleging certain appliances Whirlpool sold through its distribution chain, which includes us, were improperly designated with the ENERGY STAR ® qualification rating established by the U.S. Department of Energy and the Environmental Protection Agency. The claims against us include breach of warranty claims, as well as various state consumer protection claims. The amount of the claim is, as yet, undetermined. Whirlpool has offered to fully indemnify and defend its distributors in this lawsuit, including us, and has engaged legal counsel to defend itself and the distributors. We are monitoring Whirlpool’s defense of the claims and believe the possibility of a material loss is remote. AMTIM Capital, Inc. (“AMTIM”) acts as our representative to market our recycling services in Canada under an arrangement that pays AMTIM for revenues generated by recycling services in Canada as set forth in the agreements between the parties. A dispute has arisen between AMTIM and us with respect to the calculation of amounts due to AMTIM pursuant to the agreement. In a lawsuit filed in the province of Ontario, AMTIM claims a discrepancy in the calculation of fees due to AMTIM by us of approximately $2,000 . Although the outcome of this claim is uncertain, we believe that no further amounts are due under the terms of the agreement and will continue to defend our position relative to this lawsuit. 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 $4.1 million ( $2.5 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 two years.

Income Taxes

Income Taxes	3 Months Ended
	Apr. 02, 2016
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes Our overall effective tax rate, based on projected full-year taxable income (loss), was 34.8% and (19.6)% for the three months ended April 2, 2016 and April 4, 2015 , respectively. The effective tax rate varies from the federal statutory rate of 34% due primarily to the impact of lower foreign tax rates, the amendment of prior foreign tax returns, 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 April 2, 2016 .

Segment Information

Segment Information	3 Months Ended
	Apr. 02, 2016
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 Interim Chief Executive Officer or Chief Executive Officer have 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 2, April 4, Revenues: Retail $ 16,649 $ 17,220 Recycling 8,696 10,318 Total revenues $ 25,345 $ 27,538 Operating income (loss): Retail $ 50 $ (616 ) Recycling (763 ) (1,177 ) Unallocated corporate (74 ) (207 ) Total operating income (loss) $ (787 ) $ (2,000 ) Cash capital expenditures: Retail $ 19 $ 29 Recycling 67 15 Corporate assets not allocable 51 38 Total cash capital expenditures $ 137 $ 82 Depreciation and amortization: Retail $ 54 $ 49 Recycling 235 219 Unallocated corporate 36 62 Total depreciation and amortization $ 325 $ 330 Interest expense: Retail $ 248 $ 54 Recycling 35 199 Unallocated corporate — 68 Total interest expense $ 283 $ 321 As of April 2, April 4, Assets: Retail $ 17,031 $ 15,741 Recycling 20,820 21,985 Corporate assets not allocable 7,163 7,678 Total assets $ 45,014 $ 45,404

Recent Accounting Pronouncement

Recent Accounting Pronouncements (Notes)	3 Months Ended
	Apr. 02, 2016
Accounting Policies [Abstract]
Recent Accounting Pronouncements	Recent Accounting Pronouncements N ew A ccounting S tandards Not Yet Effective Recent Accounting Pronouncements- New Accounting Standards: 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. The updated guidance is effective for annual reporting periods beginning after December 15, 2017, and interim periods within that reporting period. Early application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. The Company will further study the implications of this statement in order to evaluate the expected impact on its consolidated financial statements. ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs: This standard, which became effective January 3, 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. The Company adopted this standard in 2016 with a reclassification of $67 of unamortized debt issuance costs to long term debt as of January 2, 2016. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330) Related to Simplifying the Measurement of Inventory which 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 December 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. I n February 2016, the FASB issued ASU No. 2016-02, “ Leases .” ASU No. 2016-02 was issued to increase transparency and comparability among organizations by recognizing all lease transactions (with terms in excess of 12 months) on the balance sheet as a lease liability and a right-of-use asset (as defined). ASU No. 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with earlier application permitted. Upon adoption, the lessee will apply the new standard retrospectively to all periods presented or retrospectively using a cumulative effect adjustment in the year of adoption. The Company is currently assessing the effect that ASU No. 2016-02 will have on its results of operations, financial position and cash flows. In 2015, the FASB issued ASU No. 2015-17, " Income Taxes Balance Sheet Classification of Deferred Taxes." ASU 2015-17 requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet. ASU 2015-17 is effective for annual and interim periods beginning after December 15, 2016, with either prospective or retrospective application permitted. Early adoption is permitted. The Company plans to adopt this ASU for annual and interim periods beginning after December 15, 2016. The Company is evaluating the potential impact to its financial position and expects to reclassify material amounts of deferred income tax balances from current to noncurrent. The adoption of this standard will not impact its results of operations.

Recent Accounting Pronounceme20

Recent Accounting Pronouncements (Policies)	3 Months Ended
	Apr. 02, 2016
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 2, 2016, 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 2, 2016 and April 4, 2015 , 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 2, 2016 , included in the Company’s Annual Report on Form 10-K filed with the SEC on April 4, 2016 .
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. Brian Conners, a member of the ARCA Board of Directors, has a controlling interest in 4301. 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. The term of the agreement with GE was extended via amendments through May 31, 2016. 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 Recent Accounting Pronouncements- New Accounting Standards: 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. The updated guidance is effective for annual reporting periods beginning after December 15, 2017, and interim periods within that reporting period. Early application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. The Company will further study the implications of this statement in order to evaluate the expected impact on its consolidated financial statements. ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs: This standard, which became effective January 3, 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. The Company adopted this standard in 2016 with a reclassification of $67 of unamortized debt issuance costs to long term debt as of January 2, 2016. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330) Related to Simplifying the Measurement of Inventory which 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 December 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. I n February 2016, the FASB issued ASU No. 2016-02, “ Leases .” ASU No. 2016-02 was issued to increase transparency and comparability among organizations by recognizing all lease transactions (with terms in excess of 12 months) on the balance sheet as a lease liability and a right-of-use asset (as defined). ASU No. 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with earlier application permitted. Upon adoption, the lessee will apply the new standard retrospectively to all periods presented or retrospectively using a cumulative effect adjustment in the year of adoption. The Company is currently assessing the effect that ASU No. 2016-02 will have on its results of operations, financial position and cash flows. In 2015, the FASB issued ASU No. 2015-17, " Income Taxes Balance Sheet Classification of Deferred Taxes." ASU 2015-17 requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet. ASU 2015-17 is effective for annual and interim periods beginning after December 15, 2016, with either prospective or retrospective application permitted. Early adoption is permitted. The Company plans to adopt this ASU for annual and interim periods beginning after December 15, 2016. The Company is evaluating the potential impact to its financial position and expects to reclassify material amounts of deferred income tax balances from current to noncurrent. The adoption of this standard will not impact its results of operations.

Inventory (Tables)

Inventory (Tables)	3 Months Ended
	Apr. 02, 2016
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: April 2, January 2, Appliances held for resale $ 15,114 $ 16,360 Processed metals from recycled appliances held for resale 157 367 Other 6 6 $ 15,277 $ 16,733

Share-based Compensation (Table

Share-based Compensation (Tables)	3 Months Ended
	Apr. 02, 2016
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 April 2, 2016 , estimated future share-based compensation expense is as follows: Balance of fiscal year 2016 $ 99 Fiscal year 2017 44 $ 143

Product Warranty (Tables)

Product Warranty (Tables)	3 Months Ended
	Apr. 02, 2016
Guarantees [Abstract]
Schedule of warranty accrual	Changes in our warranty accrual are as follows: Three Months Ended April 2, April 4, Beginning Balance $ 42 $ 30 Standard accrual based on units sold 6 6 Actual costs incurred (4 ) (4 ) Periodic accrual adjustments (5 ) (4 ) Ending Balance $ 39 $ 28

Variable Interest Entity (Table

Variable Interest Entity (Tables)	3 Months Ended
	Apr. 02, 2016
Variable Interest Entity
Summary of assets and liabilities	The following table summarizes the assets and liabilities of AAP as of April 2, 2016 , and January 2, 2016 : April 2, January 2, Assets Current assets $ 1,289 $ 696 Property and equipment, net 7,891 8,077 Other assets 83 83 Total Assets $ 9,263 $ 8,856 Liabilities Accounts payable (a) $ 1,831 $ 1,872 Accrued expenses 1,199 399 Current maturities of long-term debt obligations 1,048 946 Long-term debt obligations, net of current maturities 3,390 3,439 Other liabilities (b) 712 759 Total Liabilities $ 8,180 $ 7,415
Summary of operating results	The following table summarizes the operating results of AAP for the three months ended April 2, 2016 , and April 4, 2015 : Three Months Ended April 2, April 4, Revenues $ 1,715 $ 1,850 Gross profit 152 6 Operating loss (274 ) (516 ) Net loss (358 ) (570 )

Other Assets (Tables)

Other Assets (Tables)	3 Months Ended
	Apr. 02, 2016
Other Assets, Noncurrent [Abstract]
Schedule of other assets	Other assets as of April 2, 2016 , and January 2, 2016 , consist of the following: April 2, January 2, Deposits $ 424 $ 416 Other 123 142 Goodwill 38 38 $ 585 $ 596

Accrued Expenses (Tables)

Accrued Expenses (Tables)	3 Months Ended
	Apr. 02, 2016
Payables and Accruals [Abstract]
Schedule of accrued expenses	Accrued expenses as of April 2, 2016 , and January 2, 2016 , consist of the following: April 2, January 2, Sales tax estimates, including interest $ 4,764 $ 4,804 Compensation and benefits 1,306 1,446 Accrued incentive and rebate checks 282 293 Accrued rent 217 235 Warranty expense 39 42 Accrued payables 247 749 Deferred revenue 2,114 413 Other 899 952 $ 9,868 $ 8,934

Borrowings (Tables)

Borrowings (Tables)	3 Months Ended
	Apr. 02, 2016
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 2, 2016 , and January 2, 2016 , consist of the following: April 2, January 2, PNC term loan $ 1,211 $ 1,275 Susquehanna term loans 3,242 3,242 2.75% note, due in monthly installments of $3, including interest, due October 2024, collateralized by equipment 311 319 Capital leases and other financing obligations 1,644 988 Debt issuance costs, net (213 ) (67 ) 6,195 5,757 Less current maturities 2,732 1,251 $ 3,463 $ 4,506

Segment Information (Tables)

Segment Information (Tables)	3 Months Ended
	Apr. 02, 2016
Segment Reporting [Abstract]
Schedule of segment information	The following tables present our segment information for periods indicated: Three Months Ended April 2, April 4, Revenues: Retail $ 16,649 $ 17,220 Recycling 8,696 10,318 Total revenues $ 25,345 $ 27,538 Operating income (loss): Retail $ 50 $ (616 ) Recycling (763 ) (1,177 ) Unallocated corporate (74 ) (207 ) Total operating income (loss) $ (787 ) $ (2,000 ) Cash capital expenditures: Retail $ 19 $ 29 Recycling 67 15 Corporate assets not allocable 51 38 Total cash capital expenditures $ 137 $ 82 Depreciation and amortization: Retail $ 54 $ 49 Recycling 235 219 Unallocated corporate 36 62 Total depreciation and amortization $ 325 $ 330 Interest expense: Retail $ 248 $ 54 Recycling 35 199 Unallocated corporate — 68 Total interest expense $ 283 $ 321 As of April 2, April 4, Assets: Retail $ 17,031 $ 15,741 Recycling 20,820 21,985 Corporate assets not allocable 7,163 7,678 Total assets $ 45,014 $ 45,404

Nature of Business and Basis 29

Nature of Business and Basis of Presentation (Details)	3 Months Ended
	Apr. 02, 2016stateW	Apr. 04, 2015W	Apr. 02, 2016
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	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%

Inventory (Details)

Inventory (Details) - USD ($) $ in Thousands	Apr. 02, 2016	Jan. 02, 2016
Inventory Disclosure [Abstract]
Appliances held for resale	$ 15,114	$ 16,360
Processed metals from recycled appliances held for resale	157	367
Other	6	6
Inventory, Net	$ 15,277	$ 16,733

Earnings Per Share (Details)

Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Apr. 02, 2016	Apr. 04, 2015
Earnings Per Share [Abstract]
Options and warrants excluded from computation of earnings per share (in shares)	803	783
Net income (loss) attributable to controlling interest	$ (451)	$ (1,700)
Basic (in shares)	5,901	5,795
Weighted average shares outstanding - diluted (in shares)	5,901	5,795
Basic (in dollars per share)	$ (0.08)	$ (0.29)
Diluted (in dollars per share)	$ (0.08)	$ (0.29)

Share-based Compensation (Detai

Share-based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 02, 2016	Apr. 04, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Share-based compensation expense recognized	$ 38	$ 63
Fiscal year 2015	99
Fiscal year 2016	44
Total	$ 143

Product Warranty (Details)

Product Warranty (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 02, 2016	Apr. 04, 2015
Guarantees [Abstract]
Beginning Balance	$ 42	$ 30
Standard accrual based on units sold	6	6
Actual costs incurred	(4)	(4)
Periodic accrual adjustments	(5)	(4)
Ending Balance	$ 39	$ 28

Variable Interest Entity (Detai

Variable Interest Entity (Details) - USD ($)	3 Months Ended
	Apr. 02, 2016	Apr. 04, 2015	Jan. 02, 2016
Variable Interest Entity
Document Period End Date	Apr. 2, 2016
Variable Interest Entity, Classification of Carrying Amount, Assets
Current assets	$ 32,785,000		$ 34,371,000
Property and equipment, net	10,817,000		10,985,000
Other assets	585,000		596,000
Total	9,263,000		8,856,000
Liabilities
Accounts payable	6,726,000		7,019,000
Accrued expenses	9,868,000		8,934,000
Current maturities of long-term debt obligations	2,732,000		1,251,000
Long-term obligations, less current maturities	3,463,000		4,506,000
Other Liabilities, Noncurrent	342,000		357,000
Total	3,668,000		2,838,000
Operating results of AAP
Revenues	25,345,000	$ 27,538,000
Gross profit (loss)	6,191,000	5,868,000
Operating income (loss)	(787,000)	(2,000,000)
Net loss	(630,000)	(1,985,000)
Advances to Affiliate	299
AAP
Variable Interest Entity, Classification of Carrying Amount, Assets
Current assets	1,289,000		696,000
Property and equipment, net	7,891,000		8,077,000
Other assets	83,000		83,000
Total	9,263,000		8,856,000
Liabilities
Accounts payable	1,831,000		1,872,000
Accrued expenses	1,199,000		399,000
Current maturities of long-term debt obligations	1,048,000		946,000
Long-term obligations, less current maturities	3,390,000		3,439,000
Other Liabilities, Noncurrent	712,000		759,000
Total	8,180,000		$ 7,415,000
Operating results of AAP
Revenues	1,715,000	1,850,000
Gross profit (loss)	152,000	6,000
Operating income (loss)	(274,000)	(516,000)
Net loss	(358,000)	$ (570,000)
Promissory Notes | AAP
Operating results of AAP
Proceeds from Issuance of Debt	$ 0
Stated interest rate (as a percent)	8.00%

Other Assets (Details)

Other Assets (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 02, 2016	Apr. 04, 2015	Jan. 02, 2016
Other Assets, Noncurrent [Abstract]
Goodwill	$ 38		$ 38
Deposits	424		416
Patent costs	123		142
Total	585		$ 596
Amortization expense related to recycling contract	20	$ 20
Non-cash interest expense related to debt issuance costs	$ 42	$ 28

Accrued Expenses (Details)

Accrued Expenses (Details) - USD ($)	Apr. 02, 2016	Jan. 02, 2016
Payables and Accruals [Abstract]
Deferred Revenue	$ 1,878
Prepaid Expense, Current	165
Sales and Excise Tax Payable	4,764,000	$ 4,804,000
Compensation and benefits	1,306,000	1,446,000
Accrued incentive and rebate checks	282,000	293,000
Accrued rent	217,000	235,000
Accrued payables	247,000	749,000
Deferred revenue	2,114,000	413,000
Other	899,000	952,000
Total	$ 9,868,000	$ 8,934,000

Line of Credit (Details)

Line of Credit (Details)	3 Months Ended
	Apr. 02, 2016USD ($)	Jan. 02, 2016USD ($)
Line of Credit
Interest rate on the revolving line of credit	one-month LIBOR rate
Document Period End Date	Apr. 2, 2016
Outstanding balance under the Revolving Credit Agreement	$ 10,412,000	$ 12,668,000
Revolving line of credit | PNC
Line of Credit
Amount of revolving line of credit	$ 15,000,000
Minimum fixed charge coverage ratio	1.10
Outstanding balance under the Revolving Credit Agreement	$ 10,412,000	$ 12,668,000
Weighted average interest rate (as a percent)	4.81%	7.25%
Available borrowing capacity under the Revolving Credit Agreement	$ 1,564,000	$ 1,382,000
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
Debt Covenant, Loan Affiliate Maximum Balance	$ 1,000
Interest rate on the revolving line of credit	1-, 2- or 3-month PNC LIBOR Rate
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
Minimum [Member] | Revolving line of credit | PNC
Line of Credit
Interest rate margin (as a percent)	1.75%
Minimum [Member] | Revolving line of credit | PNC | LIBOR Rate
Line of Credit
Interest rate margin (as a percent)	2.75%
Maximum [Member] | Revolving line of credit | PNC
Line of Credit
Interest rate margin (as a percent)	3.25%
Maximum [Member] | Revolving line of credit | PNC | LIBOR Rate
Line of Credit
Interest rate margin (as a percent)	4.25%

Borrowings (Details)

Borrowings (Details)	1 Months Ended						3 Months Ended	9 Months Ended
	Feb. 27, 2016USD ($)	May. 30, 2015USD ($)	Mar. 31, 2015USD ($)	Mar. 30, 2011USD ($)loan	Feb. 28, 2011USD ($)payment	Jan. 30, 2011USD ($)	Apr. 02, 2016USD ($)	Oct. 03, 2015USD ($)	Jan. 02, 2016USD ($)
Borrowings
Long-term debt, capital lease and other financing obligations							$ 6,195,000		$ 5,757,000
Less current maturities							2,732,000		1,251,000
Long-term debt, capital lease and other financing obligations, less current maturities							$ 3,463,000		4,506,000
Interest rate							one-month LIBOR rate
AAP
Borrowings
Less current maturities							$ 1,048,000		946,000
Long-term debt, capital lease and other financing obligations, less current maturities							3,390,000		3,439,000
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							1,211,000		$ 1,275,000
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
Debt Instrument Number Payment After Consecutive Debt Payments | payment					120
Balloon Payment							$ 1,020,000
Proceeds from Issuance of Debt						$ 2,550,000
Number of consecutive monthly principal payments plus interest | payment					119
Interest rate at the end of the period (as a percent)							5.21%		7.75%
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 | LIBOR Rate | PNC
Borrowings
Interest rate							1-, 2- or 3-month PNC LIBOR Rate
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		$ 3,242,000
Floating rate term loans, due in monthly installments of $54, including interest, due March 2021, collateralized by equipment | Susquehanna Bank | AAP
Borrowings
Proceeds from Issuance of Debt				$ 4,750,000
Interest rate at the end of the period (as a percent)							6.00%		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
Proceeds from Issuance of Debt				$ 2,100,000
Debt instrument term loan two | Susquehanna Bank | AAP
Borrowings
Proceeds from Issuance of Debt				1,400,000
Debt instrument term loan three | Susquehanna Bank | AAP
Borrowings
Proceeds from Issuance of Debt				$ 1,250,000
Promissory Notes | AAP
Borrowings
Stated interest rate (as a percent)							8.00%
Proceeds from Issuance of Debt	$ 0		$ 325,000
Repayments of debt		$ 125,000
Debt outstanding							$ 300,000
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							311,000		$ 319,000
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							1,644,000		988,000
Capital leases and other financing obligations
Cost of equipment acquired under capital leases and other financing obligations							3,000		2,667,000
Accumulated amortization							1,693,000		1,635,000
Deferred Finance Costs, Net [Member] [Domain]
Borrowings
Long-term debt, capital lease and other financing obligations							$ (213,000)		$ (67,000)
Minimum [Member] | 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%
Minimum [Member] | 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 margin (as a percent)							3.25%
Maximum [Member] | 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)							3.75%
Maximum [Member] | 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 margin (as a percent)							4.75%

Commitments and Contingencies (

Commitments and Contingencies (Details) - 3 months ended Apr. 02, 2016 $ in Millions	USD ($)state	manufacturer	Total
Loss Contingencies [Line Items]
Number of appliance manufacturers that have material contracts with the Company | manufacturer		3
Loss Contingency, Damages Sought, Value	$ 0
Number of States in which Entity Operates	12		23
Sales Tax Error Correction [Member]
Loss Contingencies [Line Items]
Error Corrections and Prior Period Adjustments, Sales Tax Estimate	$ 4.1
Error Corrections and Prior Period Adjustments, Sales Tax Estimate, Net	$ 2.5

Income Taxes (Details)

Income Taxes (Details)	3 Months Ended
	Apr. 02, 2016	Apr. 04, 2015
Income Tax Disclosure [Abstract]
Effective tax rate	34.80%	(19.60%)
Statutory rate	34.00%

Segment Information (Details)

Segment Information (Details) $ in Thousands	3 Months Ended
	Apr. 02, 2016USD ($)segment	Apr. 04, 2015USD ($)segment	Jan. 02, 2016USD ($)
Segment Information
Revenues	$ 25,345	$ 27,538
Operating income (loss)	(787)	(2,000)
Assets	45,014	45,404	$ 46,779
Cash capital expenditures	137	82
Depreciation and amortization	325	330
Interest Expense	283	321
Interest Expense	$ (283)	$ (321)
Number of reportable segments | segment	2	2
Retail
Segment Information
Revenues	$ 16,649	$ 17,220
Operating income (loss)	50	(616)
Assets	17,031	15,741
Cash capital expenditures	19	29
Depreciation and amortization	54	49
Interest Expense	248	54
Recycling
Segment Information
Revenues	8,696	10,318
Operating income (loss)	(763)	(1,177)
Assets	20,820	21,985
Cash capital expenditures	67	15
Depreciation and amortization	235	219
Interest Expense	35	199
Unallocated corporate
Segment Information
Operating income (loss)	(74)	(207)
Assets	7,163	7,678
Cash capital expenditures	51	38
Depreciation and amortization	36	62
Interest Expense	$ 0	$ 68

Recent Accounting Pronounceme42

Recent Accounting Pronouncements (Details)	Apr. 02, 2016USD ($)
Accounting Policies [Abstract]
Unamortized debt issuance costs	$ 67