ARC Document Solutions Reports Results for First Quarter 2018

WALNUT CREEK, Calif., May 1, 2018 — (PRNewswire) —  ARC Document Solutions, Inc. (NYSE: ARC), a leading document solutions provider to design, engineering, construction, and facilities management professionals, today reported its financial results for the first quarter ended March 31, 2018.

Logo (PRNewsfoto/ARC Document Solutions, Inc.)

 

Financial Highlights:

   
 

Three Months Ended

 

March 31,

(All dollar amounts in millions, except EPS)

2018

 

2017

Net Sales

$

97.7

 

$

98.7

Gross Margin

30.9%

 

31.2%

Net income attributable to ARC

$

0.6

 

$

1.8

Adjusted net income attributable to ARC

$

0.5

 

$

1.9

Earnings per share - Diluted

$

0.01

 

$

0.04

Adjusted earnings per share - Diluted

$

0.01

 

$

0.04

Cash (used in) provided by operating activities

$

(2.0)

 

$

6.9

EBITDA

$

10.2

 

$

12.8

Adjusted EBITDA

$

10.9

 

$

13.6

Capital Expenditures

$

2.9

 

$

2.0

Debt & Capital Leases (including current), net of unamortized deferred financing fees

$

138.1

 

$

154.3

Management Commentary

"We are starting to see our sales declines moderating, while we experience a return to growth in our more traditional business lines. This is encouraging and clear evidence that we are making progress against our strategic objectives laid out last year," said K. "Suri" Suriyakumar, Chairman, President and CEO of ARC Document Solutions. "Our renewed focus on ARC's print business gained considerable traction during the quarter with a 2.1% increase in CDIM."

"While our efforts to protect our print business and grow our tech business are starting to show results, recent experience shows that we must continue to make changes as we move forward and stay ahead of the curve in an ever-changing business environment," said Mr. Suriyakumar. "We remain upbeat about the coming year and our strategic direction, and in pursuit of further progress, we will continue to support initiatives that are growing, but shrink costs associated with products and services that have not."

"Medical costs were exceptionally high during the period, having a 140 basis point impact on our operating margins and a two cent impact on earnings per share. Despite these costs, gross margin declined just 30 basis points," said Jorge Avalos, Chief Financial Officer. "Negative cash flow from operations was due to changes in working capital, and more specifically the timing of payables. This is a trend that is likely to be familiar to our long-term investors, and as usual, we expect this trend to reverse by the second half of the year, and anticipate strong cash flows for the year as our forecast demonstrates."

2018 First Quarter Supplemental Information:

Net sales were $97.7 million, a 1.0% decrease compared to the first quarter of 2017.

Days sales outstanding were 55 in Q1 2018 and 54 in Q1 2017.

Architectural, engineering, construction and building owner/operators (AEC/O) customers comprised approximately 79% of our total net sales, while customers outside of construction made up approximately 21% of our total net sales.

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