ALTS - NASDAQ

Thank you, Jack. Our comments may contain certain forward-looking statements regarding possible events, including expectations that are not considered guarantees of future performance. Future results may differ materially, and you should not attribute undue certainty to any forward-looking statements. Please refer to the cautionary statements in our SEC filings to understand risks that may impact our business. We are very happy with the financial results for the first quarter. Despite the weather challenges we experienced in our markets, overall, revenues were up 10%, and EBITDA grew by $1.6 million compared to the first quarter last year. We generated a bottom line profit of $1 million or $0.17 per diluted share, which was an $800,000 improvement over the first quarter last year. The increase in revenues and profit compared to the first quarter last year is primarily due to growth of our appliance replacement programs and recognizing $1 million in carbon offset revenues. Our recycling segment continues to generate solid financial results. Recycling revenues of $12.1 million were up $3.8 million compared to the first quarter last year. The growth was primarily due to a 72% increase in appliance replacement program volumes, partially offset by a 16% decline in recycling-only volumes. Mark will talk more about our recycling division later in the call. Byproduct revenues of $4.8 million were up $800,000 compared to the first quarter last year. The increase is the result of recognizing $1 million in carbon offset revenues. Of the $1 million, $700,000 was at ARCA, and $300,000 was at AAP. We expect to generate another $500,000 in carbon offset revenues during the latter part of 2014. Revenues at AAP, which are also reported on the income statement as byproduct revenues, were $2.8 million in the first quarter, up $200,000 compared with last year. The increase was due primarily to $300,000 in carbon offset revenues, and partially offset by a 6% decline in recyclable appliances. Our recycling business, including AAP, generated an operating profit of $2.1 million in the first quarter, up $1.3 million compared with last year. Within that increase, AAP improved its operating profit by $400,000 due to a combination of the carbon offset sales previously mentioned, and a 65% reduction in the acquisition costs of certain recyclable appliances. ApplianceSmart, our retail division, improved its operating profit despite the tough winter weather that negatively impacted top line sales. ApplianceSmart sales were down $1.5 million compared with the first quarter last year. The decrease in revenue was also a result of a 6% decline in same-store sales we believe to be weather-related and operating one less store. ApplianceSmart generated an operating profit of $100,000 in the first quarter, an improvement of $300,000 compared with last year. The improvement was due primarily to a more favorable sales mix and lower occupancy and operating expenses. I will now turn the call over to Brad who will talk more about ApplianceSmart.

Thanks, Jeff. Like other retailers, our first quarter business was dampened by unusual winter weather in January and February. Snowstorms and extreme cold forced some closures and hurt traffic. Fortunately, we did see some pickup in March, and are on track to a more normalized levels. Everything considered, it was a pretty solid, profitable quarter. We saw a good $300,000 swing in profitability compared to the first quarter of 2013. If we hadn't run into weather-related issues, it could've been much better. Although many appliance manufacturers are announcing modest sales gains, retailers are not necessarily seeing it in the stores. The growth has been driven primarily by multi-housing projects. Many times, manufacturers bid and ship direct to builders without any builder or distributors involved. Other manufacturers are pursuing growth by entering new markets. Of course, housing market activity impacts appliance sales. The U.S. housing market continues to struggle. The National Association of Homebuilders says that consumer credit is tight, material prices are rising and lots are in short supply. The U.S. Commerce Department reported that the residential building permits were down 2.4% in March 2014 from the prior month, but up 11.2% from March of 2013. However, there are some encouraging signs. The Pending Home Sales Index for March rose 3.4% according to The National Association of Realtors. The U.S. government's gross domestic product report in late April show consumer confidence rising, with consumer spending on pace for a 3% annual growth. Recent business news reports indicated payrolls, retail sales and manufacturing activity all rising. The economy appears to be slowly coming out of its doldrums. While waiting for that recovery to strengthen, we continue working on rightsizing our stores, including and exploring sublet opportunities with some of our leases. Our product mix remains good and we're seeing an increase in availability of out-of-carton product, which bodes well for future quarters. I'll now turn the call over to Mark to talk about ARCA Recycling.

[Operator Instructions] And we do have a question from the line of David Kanen with Aegis Capital.

Okay. It looks like free cash flow was around $2.3 million for the quarter. I'm going by what was paid down on your credit facility and then the sequential improvement in cash, is that about right?

Yes, that's about right.

From a working capital perspective, David, I don't think we're going to see a huge increase in cash coming from our working capital. The programs that generated those high receivables continue to operate at the same level. So we're going to turn working capital at the same rate, but we're not going to see it go down. Meaning, cash coming into the business.

Okay. And Jeff, on your balance sheet, the long-term obligations, less current maturities, are those primarily leases related to the retail? Can you just give me a little color on that?

Well, it's primarily -- we consolidate AAP on our balance sheet, 100% on our balance sheet, and it's primarily related to financing the URT equipment out at AAP. And then, some other financing obligations, some are leases, some aren't leases. But that's a smaller portion of the total.

[Operator Instructions] Our next question comes from the line of John Pinuco [ph], a private investor.

And we do have a follow-up question from the line of David Kanen with Aegis Capital.