Appliance Recycling Centers of America Announces Extension of Credit Agreement With PNC Bank
MINNEAPOLIS, April 1, 2013 /PRNewswire/ -- Appliance Recycling Centers of America, Inc. (NASDAQ: ARCI), a leading provider of appliance retailing and recycling services, today announced that the Company has entered into a two-year extension of its credit agreement with PNC Bank, National Association (PNC), which includes a senior secured revolving line of credit and term loan. The extension of the credit agreement, which was signed on March 14, 2013, extends the agreement to January 24, 2016.
Under terms of the extension, ARCA may borrow an aggregate principal amount of up to $15 million under the revolving line of credit, the same amount allowed under the original three-year credit agreement signed on January 24, 2011. The Company intends to use the revolving line of credit for ongoing working capital needs and general corporate purposes.
The extension of the credit agreement waived the Company's prior events of default related to the minimum fixed charge coverage ratio and the limitation on loans to affiliates and also reset the financial covenants.
Edward R. (Jack) Cameron, president and chief executive officer, commented, "We appreciate the confidence that PNC Bank has shown in ARCA by extending its credit agreement for an additional two years. The $15 million revolving line of credit, combined with the decisive steps we are taking in 2013 to improve our operational execution and profitability, better positions us to capitalize on future growth opportunities."
ARCA's three business components are uniquely positioned in the industry to work together to provide a full array of appliance-related services. ARCA Advanced Processing, LLC employs advanced technology to refine traditional appliance recycling techniques to achieve optimal revenue-generating and environmental benefits. ARCA is also the exclusive North American distributor for UNTHA Recycling Technology (URT), one of the world's leading manufacturers of technologically advanced refrigerator recycling systems and recycling facilities for electrical household appliances and electronic scrap. ARCA's regional centers process appliances at end of life to remove environmentally damaging substances and produce material byproducts for recycling for approximately 150 utilities in the U.S. and Canada. Nineteen company-owned stores under the name ApplianceSmart, Inc.® sell new appliances directly to consumers and provide affordable ENERGY STAR® options for energy efficiency appliance replacement programs.
This press release contains statements that are forward-looking statements as defined within the Private Securities Litigation Reform Act of 1995, including statements regarding ARCA's future success. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the statements made, including the risks associated with general economic conditions, competition in the retail and recycling industries and regulatory risks. Other factors that could cause operating and financial results to differ are described in ARCA's periodic reports filed with the Securities and Exchange Commission. Other risks may be detailed from time to time in reports to be filed with the SEC.
SOURCE Appliance Recycling Centers of America, Inc.