Sales from Services and Product Lines as a Percentage of Net Sales
Three Months Ended Twelve Months Ended
December 31, December 31,
-------------------- --------------------
Services and Product Line 2013 2012 2013 2012
------------------------------- --------- --------- --------- ---------
Onsite Services 30.6% 28.4% 29.9% 26.8%
Traditional Reprographics 27.3% 29.3% 28.7% 31.2%
Color Services 20.0% 19.9% 20.5% 19.5%
Equipment and Supplies Sales 14.0% 14.4% 12.7% 13.8%
Digital 8.1% 8.1% 8.2% 8.8%
Sales Reporting Format
In February 2013, ARC Document Solutions announced that in its statement of operations the Company would begin reporting net sales under "Service sales" and "Equipment and supplies sales" to better identify and report its individual services and product lines. The two new categories replace the three categories previously used to report net sales of "Reprographics services," "Facilities management," and "Equipment and supplies sales."
"Service sales" includes traditional reprographics services, onsite services, color printing services, and digital services. "Equipment and supplies sales" is self-explanatory. Net sales for the individual services and product lines that comprise each category are reported and reconciled in the Company's "Net Sales by Services and Product Line" table included herein. For historical comparisons, please consult the Company's 2012 annual report on Form 10-K.
Outlook:
ARC Document Solutions anticipates annual adjusted earnings per share in 2014 to be in the range of $0.19 to $0.23 on a fully diluted basis, and annual cash flow from operations to be in the range of $51 million to $56 million.
Teleconference and Webcast:
ARC Document Solutions will host a conference call and audio webcast today at 2:00 P.M. Pacific Time (5:00 P.M. Eastern Time) to discuss results for the Company's 2013 fourth quarter and full year. To access the live audio call, dial 800-390-5202. International callers may join the conference by dialing 719-325-2470. The conference ID number is 7088960. A live webcast will also be made available on the investor relations page of ARC Document Solution's website at www.e-arc.com.
A replay of the call will be available for five days after the call's conclusion. To access the replay, dial 888-203-1112. International callers may access the replay by dialing 719-457-0820. The conference ID number is 7088960. The webcast will also be made available at www.e-arc.com for approximately 90 days following the call's conclusion.
About ARC Document Solutions (NYSE: ARC)
ARC Document Solutions is a leading document solutions company serving businesses of all types, with an emphasis on the non-residential segment of the architecture, engineering and construction industries. The Company helps more than 90,000 customers reduce costs and increase efficiency in the use of their documents, improve document access and control, and offers a wide variety of ways to print, produce, and store documents. ARC provides its solutions onsite in more than 7,700 of its customers' offices, offsite in service centers around the world, and digitally in the form of proprietary software and web applications. For more information please visit www.e-arc.com.
Forward-Looking Statements
This press release contains forward-looking statements that are based on current opinions, estimates and assumptions of management regarding future events and the future financial performance of the Company. Words such as "expected," "consider" "intended," and similar expressions identify forward-looking statements and all statements other than statements of historical fact, including, but not limited to, any projections regarding earnings, revenues and financial performance of the Company, could be deemed forward-looking statements. We caution you that such statements are only predictions and are subject to certain risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements. In addition to matters affecting the construction, managed print services, document management or reprographics industries, or the economy generally, factors that could cause actual results to differ from expectations stated in forward-looking statements include, among others, the factors described in the caption entitled "Risk Factors" in Item 1A in ARC Document Solution's Annual Report on Form 10-K for the fiscal year ended December 31, 2012, Quarterly Reports on Form 10-Q, and other periodic filings and prospectuses. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.
ARC Document Solutions, Inc.
Consolidated Balance Sheets
(Dollars in thousands, except per share data)
(Unaudited)
------------- -------------
December 31, December 31,
------------- -------------
Current assets: 2013 2012
------------- -------------
Cash and cash equivalents $ 27,362 $ 28,021
Accounts receivable, net of allowances for
accounts receivable of $2,517 and $2,634 56,328 51,855
Inventories, net 14,047 14,251
Deferred income taxes 356 --
Prepaid expenses 4,324 3,277
Other current assets 4,013 6,819
------------- -------------
Total current assets 106,430 104,223
Property and equipment, net of accumulated
depreciation of $206,636 and $197,830 56,181 56,471
Goodwill 212,608 212,608
Other intangible assets, net 27,856 34,498
Deferred financing fees, net 3,242 4,219
Deferred income taxes 1,186 1,246
Other assets 2,419 2,574
------------- -------------
Total assets $ 409,922 $ 415,839
============= =============
Current liabilities:
Accounts payable $ 23,363 $ 21,215
Accrued payroll and payroll-related
expenses 11,497 6,774
Accrued expenses 21,365 22,321
Current portion of long-term debt and
capital leases 21,500 13,263
------------- -------------
Total current liabilities 77,725 63,573
Long-term debt and capital leases 198,228 209,262
Deferred income taxes 31,667 28,936
Other long-term liabilities 3,163 3,231
------------- -------------
Total liabilities 310,783 305,002
------------- -------------
Commitments and contingencies
Stockholders' equity:
ARC Document Solutions, Inc. stockholders'
equity:
Preferred stock, $0.001 par value, 25,000
shares authorized; 0 shares issued and
outstanding -- --
Common stock, $0.001 par value, 150,000
shares authorized; 46,365 and 46,274
shares issued and 46,320 and 46,262
shares outstanding 46 46
Additional paid-in capital 105,806 102,510
Retained (deficit) earnings (14,628) 695
Accumulated other comprehensive income 634 689
------------- -------------
91,858 103,940
Less cost of common stock in treasury, 45
and 12 shares 168 44
------------- -------------
Total ARC Document Solutions, Inc.
stockholders' equity 91,690 103,896
Noncontrolling interest 7,449 6,941
------------- -------------
Total equity 99,139 110,837
------------- -------------
Total liabilities and equity $ 409,922 $ 415,839
============= =============
ARC Document Solutions, Inc.
Consolidated Statements of Operations
(Dollars in thousands, except per share data)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
-------------------- --------------------
2013 2012 2013 2012
--------- --------- --------- ---------
Service sales $ 87,100 $ 82,969 $ 355,358 $ 350,260
Equipment and supplies sales 14,185 13,922 51,837 55,858
--------- --------- --------- ---------
Total net sales 101,285 96,891 407,195 406,118
Cost of sales 67,818 68,251 272,858 282,599
--------- --------- --------- ---------
Gross profit 33,467 28,640 134,337 123,519
Selling, general and
administrative expenses 24,117 21,727 96,800 93,073
Amortization of intangible
assets 1,556 1,791 6,612 11,035
Goodwill impairment -- -- -- 16,707
Restructuring expense 779 3,320 2,544 3,320
--------- --------- --------- ---------
Income (loss) from operations 7,015 1,802 28,381 (616)
Other income (20) (21) (106) (100)
Loss on extinguishment of debt 16,077 -- 16,339 --
Interest expense, net 5,725 6,490 23,737 28,165
--------- --------- --------- ---------
Loss before income tax
provision (14,767) (4,667) (11,589) (28,681)
Income tax provision 1,040 939 2,986 2,784
--------- --------- --------- ---------
Net loss (15,807) (5,606) (14,575) (31,465)
Income attributable to
noncontrolling interest (203) (290) (748) (503)
--------- --------- --------- ---------
Net loss attributable to ARC
Document Solutions, Inc.
shareholders $ (16,010) $ (5,896) $ (15,323) $ (31,968)
========= ========= ========= =========
Loss per share attributable to
ARC Document Solutions, Inc.
shareholders:
Basic $ (0.35) $ (0.13) $ (0.33) $ (0.70)
========= ========= ========= =========
Diluted $ (0.35) $ (0.13) $ (0.33) $ (0.70)
========= ========= ========= =========
Weighted average common shares
outstanding:
Basic 45,928 45,749 45,856 45,668
Diluted 45,928 45,749 45,856 45,668
ARC Document Solutions, Inc.
Non-GAAP Measures Reconciliation of cash flows provided by operating
activities to EBIT, EBITDA and Adjusted EBITDA (Dollars in thousands)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------- -------------------
2013 2012 2013 2012
-------- -------- -------- --------
Cash flows provided by operating
activities (1) $ 6,788 $ 6,673 $ 46,798 $ 37,552
Changes in operating assets
and liabilities, net of
effect of business
acquisitions 4,629 1,647 (2,388) (463)
Non-cash expenses, including
depreciation, amortization
and restructuring (27,224) (13,926) (58,985) (68,554)
Income tax provision 1,040 939 2,986 2,784
Interest expense, net 5,725 6,490 23,737 28,165
Income attributable to
noncontrolling interest (203) (290) (748) (503)
-------- -------- -------- --------
EBIT (9,245) 1,533 11,400 (1,019)
Depreciation and amortization 8,655 9,012 34,745 39,522
-------- -------- -------- --------
EBITDA (590) 10,545 46,145 38,503
Loss on extinguishment of debt 16,077 -- 16,339 --
Goodwill impairment -- -- -- 16,707
Restructuring expense 779 3,320 2,544 3,320
Stock-based compensation 1,158 542 3,207 1,999
-------- -------- -------- --------
Adjusted EBITDA $ 17,424 $ 14,407 $ 68,235 $ 60,529
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