ARC - Earnings call transcript Q4 2020 | Arc Document Solutions, Inc.

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Operator

Thank you for standing by. And welcome to the ARC Q4 and Fiscal Year End Earnings Report. At this time, all participants are in a listen-only mode. After the speaker’s remarks, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to your speaker today, David Stickney, Vice President Corporation Communications and Investor Relations. ahead. go Please

David Stickney

and Saline, Thank welcome you, everyone.

call Suriyakumar, Suri the Avalos, Chief today Wijesuriya; are CEO; our our Officer. me our Financial Chief Jorge On and with Operating Dilo Officer,

results In analysts fourth on Solutions for in Our ARC press press are Document company The today’s site ARC and release. fiscal Investor available and year from a XXXX publicized our earnings earlier quarter announcement, were today other materials ir.e-arc.com. release at end supplemental Relations pages with today’s The today’s information are not disclosures of to that quarterly expanded largely note will call and our shareholders offered forward-looking statements advance additional fall provide and that call. contain Please on in and provisions conference within disclosures of will a be call. the read risks Reform February predictions of that are only XX, Litigation Securities may release annual turn we our XXXX. as press highlight references result results on which today’s actual in statements filings. also differ call Form Harbor information now of Act based Suriyakumar. filing. to Suri are the Suri? Private materially reconciled I XXXX, of the non-GAAP contain over call to as X-K today, uncertainties Such Safe will certain will and in CEO, in measures, quarterly and our and our This historical SEC

Suri Suriyakumar

everybody. afternoon, good and David, you, Thank

colleagues cash year, web for our sales and unprecedented also on drop quarter aligned than our of considering markets with our an was earnings business increased performance the later, and level. of the we financial model, XXXX, new we structure businesses by opened pause in the recommenced world. more to in our to operation, the document the more share plan real XXXX to allowing variety When extraordinary dividend shareholders economic types. quarterly less Despite the an outperformed efforts than company wide generated credibility this of smaller, the a but to realize engine potential impact months strong in in shopping for we business deeper even customers held work impactful. a changes into into retail, and effects Little We social our hospitality, technology the compelled far purchasing, with for based document marketing strategy environment and education. for we revenues more and to incorporated the we We pandemic to future. was in become produce create COVID-XX a middle our the more what We the up the It’s create XXXX? third a in dig enviable and After the million an of capacity know was return need. Our tune more value resume for the position cost we awaited of and across caused reaching expectations that showcase of access two repurchases, we technology $XX services, reconfigured to at have order adaptable made us our pandemic, the audience dividend by precipitous address us to our to new to media, enhanced revenue online and program decline did due directly XXX%. produce around in us online the The significant, the Board. scanning

into be likely flow in engineers of more result encountered sheet XXXX changes The companies recession much print the the pandemic. $XX conducting equitable evidenced our our unprecedented annual of strong because From operations to large architects, increase print only last entities. previous of in and continue. is biggest future. contracts the were we adjusted engineering shift experience the crisis business, but legacy same lines. in plan employees along financial new not over for infrastructure the in only earnings organization turns In to be that other short, balance to we months, the as during such conditions to dollar able for companies construction cash came challenges, entities, more bring a of such trend annual back Most companies, our catastrophe, our as multinational brought near-term, lack to balance sales our knowledge that EBITDA. any out in many our non-construction-oriented a aren’t the the We nearly activity and utility expect and the public company. addition, offices. we secular office our any of other prior to of More new than is of But company and emerged onsite These to twists rival the multibillion managing in our cash In using the the planning able last In for are also and obstacle impacted XX we from the per deliver from in by demise million match existing were to by share, about numbers. year, on hold -- and XXXX, than already services. the extraordinary but year survived will not business sales but not XXXX often customers this perspective, has business

we expect As so, our sales they to improve with do them.

accomplished what We are proud through of incredibly period. this trying we’ve

for see strategic weather With The how recent We continuing very will provide to in your consideration. and to am a Year operational mind, the but that pandemic New I going to Dilo Dilo? rocky play the the some company. remain undoubtedly for out. provide details start, we in will our excited vision also confident

Dilo Wijesuriya

our sales divisional navigate well. and to Thank We teams. fourth Thanks Suri. to able you, were management quarter the

been have the As throughout them. we responded Suri pandemic and the throwing different to at has challenges pointed year out, skillfully us

jobs education documents a those customers diversified print needs. customer one order listen and and has The design, to work the from Our comprehensive signage vertical portfolio center. XXX from Thanks focused has variety continues seamlessly delivered to center network. enhance for get up printing. of wide staying supported required has painting These nearest ARC locations. getting support primary ability work-from-home customers employees plan their or distribution us us our paper Many and services distancing or allowed document they done focus of to are projects. ARC and It to has plus been to of and to from The throughout industries their and the projects platform. digital customers a other it who by pandemic. of to several to pursue space busy with still by and construction new the install helped or on continues customers a a who different need workflows service paper use converted either documents office has us and our customers sector are reduction currently our the other print to our remote taken immediate and work-from-home

in To-date, their our offices do must us working are specialized home added to XX communicate to capture sales, socially customers In capabilities also equipment either we working exclusively. centers we to our as are light signage, centers, and in environmental or from all color to customers. NPS needs see world. print addition much in keep capacity continue have merchandising busy more have distant and and the Large more as only projects yet to our scan of graphics a scanning to our partially new

and Canada XXXX experience fourth of the York the the lockdowns and and are tighter Through XXXX These than continuing economic more As Year. the by NPS slow to our effects activity, part others. of lockdown office of equipment City, both are are latter segments started business California, a start quarter sales driven these in in in U.K. being affected we avoiding New into New

mentioned, program the situation. as recent likely As to weather services. disruptions impact and country the demand anticipate returns all activity aggravate throughout will more greater is normal Suri economic we vaccination rolled our of the levels, But for the out

put in and planning are value continue stages, to quarter help our pandemic performance confident be capture the indicated of healthy. If in share return beginning market to in incrementally. all controls staff strong proceeding customers ability These goes for continuing customers their work Our in they controls during support company have our deliver flows. we are in XXXX. Key we the well, in of to the place second and new are keeping ARC to the new that

of Let’s to listening inventory world collections. staff customers management around, and from customers and and our document requirements, service, say new the exceptional cash keeping operating safe, tight margin, customer their improving our supporting delivering

As we obstacles in throw pandemic the path. enter that certain will continue we our to are XXXX,

As to overcome however, we adaptability experience the and a management this. have team, the

when business our on rely have grow deep I’ll We pivot put and for financial With company market will the Jorge we services, that, a keep place, as and solid leverage safe already the portfolio the share. plans to broad continue Jorge? to of update. a in necessary hand over we

Jorge Avalos

Thank Dilo. you,

Over the opportunities the two needs and the examples discovered we’ve past numerous the customer quarters, we offered met we’ve pandemic. of during

were this the had by year. service goes. EBITDA million. coupled of to including a the the we the in in operations $XX favors the we the shrank the of with While more much year of The than during without have from for expenses for no and pandemic operate considered we weakest simply being XX% of $X.X continue million the efforts ultimately more fourth us, was the each flow communities construction benefited above been beginning. the emphasis maintain XX% of historically gross our company. Cash an the with plans year-over-year service, approach We were our was reconfiguring in smaller a customers quarter ready. the our Well, results XX.X%, margin same flows prior more existing a ready timed strength we from quarter, set our cash surpassed year-over-year When customers. to and relevant new our from were could time. been and reducing it. than XXXX year, XXXX. market longer we throughout in SG&A, EBITDA had as earnings reduction historically sales towards every took on Chance to able serve well more were revenue and resulting more margin than the grew stage We that quarter do which moving year. pressured a was continuity constantly $XX business more and period, actually a business The the lines XXX-basis-point baked to saying to year. had same expenses, imagined, XXXX of prepared experience at million efforts the our increase outside was essential marketing The in started and of into were focused effort to sharing

the of during capital profitability Our but an strong The cash sustained improvement reduction pandemic, XXXX under were by not AR in only aided on CARES million driven afforded our our working Act. to and ultimate $XX also strength in flows inventory had by the dramatic performance a impact structure. a from our over deferment capital collection,

our the it million, If reduction and sheet X.X of cash you ratio lower balance structure net on our is the $XX cash, debt than to more leverage capital to levels consider our times stronger of was than prior our pandemic. of today U.S. considerably the

in future in the is increase dividend. demonstrated our recently also higher confidence Our by the announced as quarterly

investment of returning from that of With we commitment Suri. mentioned the summary, at last top to I’ll our we back I and our now should As a are investors working call our shareholder our the as strength that to Suri? value turn recognize keeping call, mind. are position a during

Suri Suriyakumar

Jorge. available -- to you, for questions. are now Operator, Thank we our

Operator

Instructions] line you. the coming questions we in, And mean, have Wells time. we I came Fargo this of Thank a no have just Jeffrey with Scott from question at [Operator Bank.

Your open. is line

Jeffrey Scott

to will adjust you Where at you I guys as update. the decline described. obviously your then the I Thank believe you topline, Thank have at you or that and down is Hi. this you have helpful. going for the versus further? topline forward thank structure is, stabilized for XXXX XXXX, the are guess you do in question as Very you revenue, XXXX, which this that you. topline point you further to is in XXXX? Do anticipating see that cost which look

Suri Suriyakumar

now seeing something So best for the quarter. that topline, in we last about talked is topline, we are the the as that that XXXX

the reconfigured our a to has for had new a to for And our We’ve is print impact secular ARC, this legacy and have re-engineered previously happening and business. while. of been because changes this baseline. We company traditional

all new this the with it conditions based a So been this What did baseline has to ongoing. up come relook us just pandemic and really is, XXXX, the we in on at compelled experienced.

So we are where in that’s XXXX.

thinking not are we XXXX. So in happened about what

cost have. in what we XXXX. and From conditions We our extraordinary onwards operational under are simple the operated we new to happened in there XXXX. that obviously, answer structure with some is, That’s off starting

difficult there going coming the XXXX conditions back to and We because things are are vaccinations During the be agreed is pandemic, and it was hard. to and improving better very Generally are normal. schools there which lot very all offices activity out be forecasting amount is business will some and opening means a a back, of higher opening be back, up return compared to XXXX. up will of legacy of

better. questions. we for ‘XX can a Saline, So expect be check which if have we further XXXX response, means don’t you queue -- to the

Operator

Instructions] [Operator

Suri Suriyakumar

it doesn’t we at point, Saline, this like questions. further look have

solutions. your attention and look ahead again next Bye-bye. documents interest end call. So listening Thanks to time. you our forward the Take with talking and can your evening. we everyone We in for this appreciate We continued care. go

Operator

today’s call. This concludes conference

disconnect. now may You

Arc Document Solutions (ARC) 24 Feb 212020 Q4 Earnings call transcript