ARC - Earnings call 3 2023 | Arc Document Solutions, Inc.

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Operator

Good day. My name is Jordan, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the ARC Document Solutions Conference Call. [Operator Instructions]Thank you. Vice President of Investor Relations, David Stickney, you may begin the conference.

David Stickney

and welcome, our call President CEO Operating Dilo and are me and Jordan, Chief Officer, Suriyakumar, our Suri and Wijesuriya; you, everyone.On with the today Chief Financial Thank Officer. Avalos, Jorge Chairman; our

forward-looking November at publicized call Relations may results we release. X-K and a reconciled on Document pages press release statements, release result other highlight on were call press a turn will And Chairman available measures are SEC X, website that quarterly in today of company in ARC our and the Suri CEO, Our our non-GAAP third today, materials only XXXX. are XXXX ir.e-arc.com.Please annual Suri? from are earlier today's predictions and actual differ quarter materially Suriyakumar. filing.I'll over today Form as and for in information contain uncertainties and note to filings. results press risks that The our they our Solutions and Any Investor based of as discussed

Kumarakulasingam Suriyakumar

from made in black-and-white we continuing largely and trends customers remain scanning, industry demand new of surprising the than been Thank visual in very had afternoon, the identified us robust, similar other year plans for X% in sales and dropped posted -- construction-based quarter, quarter the growth invest up our and serve.Volume day printing million. we is everyone.Overall digitizing in fell. this files a X about you, in the to just second $X less X.X%. the year the documents good This the of of color it or heavily Adjusted communications year, continue reproducing this have coming for sales last QX. for areas every not light and we drop in in Sales David, would working strategic we is digital as puts situation to and

supporting they report Dilo economic and quarter cash margins, dividend primarily annual drop our our as for sustained and a continuing and further it That a interest uncertain for via to capable our construction. shareholders we value of flows to the review these our in projected, in during in increase quarter. resilient volatile due stock was than conditions August. remain sales, Dilo? commitment Jorge and call discussion, and were the now of in in the will As the comments despite to second over more purchases.Using more detailed would framework earnings turn I said, This resulting rates,

Dilantha "Dilo" Wijesuriya

provide Thank and on the with you, pleased quarter. for update Suri.I'm to you an ARC's strategic performance third recent direction

improving.Our spending and are interest largely customers due many to rates color reduced lines for our challenges, cautious challenging has our demonstrated have these efforts. continuing document investment strategic diversification market higher business resilience While divisions scanning and by conditions, Despite adaptability. and made services delivered company digital growth

various locations, in the We are customer wide shows, and demand. multiple services sports use strong generating have trade color and events, projects positive of of graphic including across markets, large These stadiums. digital secured and characterized variety projects schools products by reviews a

institutions enhanced for throughput success color demand well capacity customers as expanded expansion at for scanning has document also key services.Document demand our to along extends digital Our municipalities, and our efficiency document validating projects. scanning experienced projects. further locations. smaller with through This scanning and year, with ongoing capabilities we the smaller the numerous from Midway increased satisfied our cultural historical venues high archives and

initiatives as services fluctuate. to revenue continues declined return and referrals complex for segment.Our office reputation continue existing and previous detailed to growth from in this Our attract clients, our year-over-year to work underpinning on-site

improving However, our agreements certified client and program, equipment satisfaction our using service on-site enhancing large successfully we have margins. renewed several

from work activity, keep customers, construction Additionally, the to our capital overflow commercial due fewer including service low plan and to and challenges business, and further has higher costs expenditure service profitable line, remains control models. operations faced to continue operating streamline construction-based we office construction in and we margins.In contributing this, check. printing center plan a residential printing network attracted Despite to

We have and goods We cost maintain our improvement leverage footprint production and expenses in material, cross-trained to remain our production this management labor an in managing fruitful, resulting our quarter. in efficiency.Our have been efficiently. vigilant employees of efforts in sold

remains scanning robust. Our in pipeline, especially calligraphic and

efficiency Our capitalize position and to these on service us well centers increased opportunities. capacity

for new motivated is summary, highly our and improving, to marketing leads.In segment. actively yielding quality declines ratio the business plan win-loss new offset Our printing securing business and higher is team our efforts in are

sharp Our been the a the line. hallmark that financial top focus has while bottom our maintaining discipline remains of on line

We the our turn and are influence. I continued our areas that, to leveraging Jorge. experience committed by trust support.With and the for we Jorge? look our progress to can will sharing continuous over call remaining undistracted beyond forward you external coming quarters. control, to Thank your expertise over We factors in

Jorge Avalos

you, fell gross quarterly overall X%, Thank our were points. XX up Dilo.While basis sales margins

started any key $X.X for leverage despite flow was Our characteristic of built prior pressures. fell $X.XX. from quarterly The impact suffering payables, year. half inflationary sales first our timing for of collections to Due up of million is business the a second it. flat slow difficult in our extremely and at the level significantly a XXXX operations essentially of felt earnings year half lower to ability EPS and make Cash remains and the quarter to SG&A out from the of sales of to the comparison model. the momentum

million slightly case year-to-date. when we only higher our flow perspective year-to-date fluctuate basis. year-to-date XX% income, remains throughout essentially from and comparisons shares. spending, is we but constraining on XXXX faced costs. than Obviously, the in $XX down and annual while had also than EBITDA, growth EPS in the income would business X% an did $XX a and generation, which been reflect and to just maintain we capable are intra-quarter have are affecting in fully income, flat better income leverage and But to And issues down the flow have reconfiguration million debt debt our $XX.X at numbers. our of always our we to $X.XX capital revolving on repurchasing sheet, our represent Given performance expectations we against cash in of of operating healthy very the resume January. in Year-to-date economy and well the interest in Year-to-date, net very XXXX. to quarter, diversification its is save supporting continuing the better with Xx, at operations.As use cash a dividend not performance our point, in remains for reviewing both encouraged this operating an EBITDA. cash regards EPS our cost the and net year, not of more to larger the cash, the tendency million a position annual much our we basis model.With continue balance to than under typically low Net prior on

end of reliable free the we fluctuate more returns shareholder out we year, and growth, and the of in well cash XXXX repurchase confident things ARC. to We to matter to shareholder the paid line return than the XX% on may our shareholders also focusing we in adjusted our generate on the that a exceed $X these XXXX.Our a remain Suri. Suri? slightly $X.X of most And for for Via that call more we dividends, generation shares. continue are and turn quarter continue coming way remainder quarters.With cash million at to to of I'll flow as to to in than but return by expect methods, quarterly the top $XX the value that, we of back million during million result, opportunities cash used

Kumarakulasingam Suriyakumar

Thank all now you, Operator, Jorge. available questions. are we listeners' for

Operator

Sidoti first Instructions] Greg now Company. is question [Operator from for And & from our Burns

Gregory Burns

decline in decline quarter, When we at you from the us AEC was was your could growth printing give what from what and printing the look the breakdown this of color the markets? digital X.X%

Kumarakulasingam Suriyakumar

you answer? would Jorge, to Yes. like

Jorge Avalos

Sure.

type plant printing, of business. i.e., blueprinting is So as said, line item that XX% we've our roughly always of legacy

X% is X% range. other legacy that The X% reprographics, in color was regards up revenue half to X%. was down the to and graphics. traditional between In that Color

Gregory Burns

was scanning, Okay. than a to that just grew about get better a Is All for And business that we think then of the just little down less were business bit it feel sequentially to going and expecting. right. how project trying for based? forward? profile growth I'm

Kumarakulasingam Suriyakumar

Dilo?

Dilantha "Dilo" Wijesuriya

Yes.

continuing So last billing scanning the the to grow. are the It's to same. continuing actually, year, be rates revenue,

a we was had year. significant one One project had built not quarter, third that completed and that issues this year, we digital that of was the service during last we the customer it there as that

look you that's declined. year-over-year, to rate. the in So the XX% are we you at services, from X% has if a otherwise, scanning growth still But -- rate that growth see why

Jorge Avalos

Yes.

opportunities scanning, all really So if mark. look the we that were we day-to-day you from go at after the percent it growing XX-plus at really time, our

the Dilo one the but job skewing business. last As that feel in million year, year-over-year of scanning odd we an last roughly we booked kind quarter growth about in was third that very that year, that ball $X.X it's mentioned, XX%-plus of confident results,

Gregory Burns

I level here the think at difficult line you're look sight of that when printing? to and or when you seeing then you -- might kind plan more of guess, little but have the it's have opportunities scanning, you -- in when do back maybe do of And the offset Okay. declines, you growth for get could on a you you color now, growth in traditional maybe

Kumarakulasingam Suriyakumar

Dilo?

Dilantha "Dilo" Wijesuriya

Yes.

you revenue. revenue know, primary So if buckets our are as you look X line, of at there

the the directly challenged the one business lines as see interest, well printing industry, right? as equipment plain we when sales. as the connected revenue So is will challenging at activity -- primarily segment that currently improvements the paper opportunities the obviously, rate of That So look construction we see might the market of the we to had for probably into the new construction primary are is so reasons see tenant increased rates interest reduced some that totally increased construction. and in brand stabilizing, forth.As going interest new and for year, we there that is situation the

As in that within see we some we growth see as organization. construction would our stabilization market, some soon definitely

when digital strong.Marketing leads. opportunities are So other continuing market of our to color, it new you a line us -- be strategic the take lot bringing comes when growth activities are to the very

shows, are a trade shows, office see color around as very on of their top us sized of of the are bring well. execute really, marketing amount they're And we revolving organizations significantly that projects graphics. renovations lot project. of fair lot of place quite sizable the doing that activities. brand to a work, of They Many are takes lot trade of we there continuing rebranding Some focusing a activity

continuing is is to they the very a It's that very, revenue very the already are marketing opportunities, strong Pipeline through bringing that very, -- So for us grow. leads future side to also opportunities, the and be activities. level. revenue, good scanned, company.Document healthy our of booked a contracts booked at pipeline, very lot are is strong, scanning

So we overall. see therefore, as we into will bullish new our to And lines. company, some about as construction is stabilization those X continue year, see soon market that some going a to the be hope the we growth as continue very in positive

Operator

from from of comes the Singular Research. question next Your Marsh David line

David Marsh

those During if any wins been so, sectors significant in? could that talk And the could you they did quarter, you talk you have that customer about about? have

Kumarakulasingam Suriyakumar

it. for Go

Dilantha "Dilo" Wijesuriya

Yes.

as speak obviously, David, XXX Because don't verticals. on we you necessarily that out because have job, sells per And XX of locations. focus remember, I customer on consultants one big specific XXX company, as the we sales wouldn't, we know, So focus a right? se about a

all as our of locally So customers campaigns jobs type simple we very segments, from well jobs national of types that come do campaigns all well. as versus as regional from

brands to well.With I is as about our of can when wins all to types from that some regard what ARC color continuing sizes we top we that that of sell excited all one working cannot coming So customers, growth. digital are to pinpoint are I is to getting specific at the There look see area from all It's segments, color jobs brands. grow. on we to side get the with and the continuing

couple a digital for renewed sizable of have quarter. We printing in the contracts last

satisfy good with So as U.S. our next the the our or happening customers' quarter, really potential going Canada and the are to U.K., and go the things in with they see the on are in some all things into promote with graphics. visual the through we revolving things can market, opportunities brands we ability around happening in and

David Marsh

that advertising Got not from uptick really Or increased you. And guys? are guys kind in do political you revenue any activity? driver from at any you for realizing of spaces? get a political is you Or all big

Kumarakulasingam Suriyakumar

for political significant in garden David, are that and all Yes, that or work that's and very on that market is see much do have you long But not people those And necessarily of all market we cheap very market. margins that the They're front your the at X. we where stick banner because occasional cheap extremely us. cheap, of thin, don't material, a play runs. we that printing. in are concentrate don't market in

David Marsh

it. Got

little Just to balance about Could What average turning the bit sheet. talk share purchase you price the repurchases? share? a was per the

Jorge Avalos

But for in about next Roughly distribute XX-Q that our come those, the the in spent $X repurchases for so. quarter. Average on quarter, we it roughly on price or range. we will here $X out million share day when the

David Marsh

there, authorization Jorge? you And Okay. remaining on could refresh me

Jorge Avalos

$X million We have about left.

David Marsh

okay. authorized, million $X

Jorge Avalos

buying million have shares, we It been was but left. Obviously, $XX we've $X authorized about million.

David Marsh

I then that are? are And quarter Is not pretty interest you that quarter. was in could your leverage appreciate that further but where -- you're there interest big the And the drive issue for a expense that I anything continue you that with see improvement the down. it bring Obviously, ticked nice $XX,XXX the things there lower? use something I considering there, is is Or in expense to throughout is to comment quarter. you did you the in Right. cash revolver a moment? that at point down to the comfortable guys, thought do

Jorge Avalos

using that to there. we're I the we said down view I on of pay debt the multiple in hand cash doing as X revolver Yes. having us that we're script, as means I'm interest not expense kind said any which And comment just bank I incurring what times that our I think really in to because my cash is, X, have quarters,

much back you right, on can quarter, bring that at was million, at price you we as $XX So if net share it said, kind your the comment of we on $X.XX. look how of, bought our already it average shares can cash go?And correction quick we're actually the the down? Well, for number, we lower

David Marsh

going appreciate else in. if I it. wants it. see to pause and to anybody Got I'm jump there

Operator

questions the at closing further no I are turn Stickney time. to There over this for now call remarks. David will

David Stickney

Thanks afternoon. for this interest very much your

progress have to Thanks very As with forward always, very We we look in night. in forward Good much you here. participation appreciate evening. again continued our great February. talking and a your much,

Operator

call. conference today's concludes This

now may disconnect. You

Arc Document Solutions (ARC) 2 Nov 232023 Q3 Earnings call transcript