In 1990, Jack Cameron, founder, president, and CEO of Appliance Recycling Centers of America, Inc. (ARCA), was prepping his 14-year-old St. Paul company for its IPO the next year (Nasdaq: ARCI)—just one of several big transitions that Duane Carlson would prove the right guide for.
“The company’s board, up to that time, was myself, my wife, our accountant, and our lawyer,” Cameron recalls. “It was important for us to have people on the board that understood the sensitivity and the issues you have when you’re a public company.”
Carlson was a fortuitous recruit, a seasoned accountant who’d built corporate tax departments and would be knowledgeable about the company’s new financial reporting requirements. In addition, Carlson had cofounded, operated, and helped build Lee Data Corporation into a $200 million, 1,400-employee publicly traded competitor to IBM before selling it in 1988. His next venture, in 1991, would be NetStar, Inc., a publicly traded maker of high-speed routers and computer networking equipment that was sold in 1996 for $300 million and is now a part of Lucent Technologies.
“Duane had a great reputation in the financial community in the Twin Cities,” Cameron says. “Just adding him to the board added instant credibility to the company.”
For his part, Carlson says he was impressed by ARCA’s ownership and business model, which had shifted from retail sales of used appliances to primarily working with utilities nationwide to take old, inefficient appliances out of service and dispose of them in an environmentally friendly way.
“I felt it was something the world needed—to stop throwing all these old appliances into landfills,” Carlson says. The company, with $3.5 million in annual revenue when he joined the board, quickly grew. Soon, Cameron says, “we were doing about $20 million in revenue, and about $19 million was in the utility business, $1 million or so was in retail.”
But with regulatory changes in the mid-1990s, most utility companies discontinued their appliance recycling programs. ARCA suddenly faced tremendous revenue losses and had to find a way to recover. And now it could tap Carlson’s experience with start-ups.
ARCA decided to refuel its slow-running retail business by launching a new brand, ApplianceSmart Factory Outlets, in 1998. Rather than used appliances, it would sell manufacturers’ discontinued and distressed merchandise. Cameron says that ARCA leaned heavily on Carlson to launch the business, which now has 17 stores in Minnesota, Ohio, Georgia, and Texas. ARCA, with more than $100 million in annual revenues, draws about $72 million from ApplianceSmart.
Through all the changes, Cameron says that Carlson has consistently emphasized honesty toward shareholders. “We’ve been public since 1991, and we’ve never had an issue—not with the Securities and Exchange Commission, no lawsuits, no shareholder complaints . . . . The way you get in trouble is sticking your head in the sand. Duane simply doesn’t allow that to happen.”
Carlson, 73, has worked as an independent business consultant since 1997 and once served on a dozen boards concurrently. “You could say I’ve become a professional board member,” he chuckles. ARCA is his only public-company post.
“I’ve been very impressed with the way the management, particularly Jack Cameron, has operated and turned the company around,” Carlson says. “As long as I can be a part of that, I’ll be a part of it.”
It looks like Carlson’s guidance could be needed for another big transition. New federal programs for appliance recycling mean that that side of ARCA’s business is picking up again, Cameron says.
Duane Carlson is also a director for: Seven privately held companies, which he declines to name.