investor overview - s2.q4cdn.coms2.q4cdn.com/.../overview/160525-q1-arc-investor-overview.pdf ·...

20
Information is current to May 3, 2016 unless otherwise indicated Investor Overview

Upload: others

Post on 24-Jun-2020

6 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: Investor Overview - s2.q4cdn.coms2.q4cdn.com/.../overview/160525-Q1-ARC-Investor-Overview.pdf · Investor Overview. ARC Document Solutions assists design and construction professionals

Information is current to May 3, 2016 unless otherwise indicated

Investor Overview

Page 2: Investor Overview - s2.q4cdn.coms2.q4cdn.com/.../overview/160525-Q1-ARC-Investor-Overview.pdf · Investor Overview. ARC Document Solutions assists design and construction professionals

ARC Document Solutions assists design and construction professionals in the management and distribution of their information.

Page 3: Investor Overview - s2.q4cdn.coms2.q4cdn.com/.../overview/160525-Q1-ARC-Investor-Overview.pdf · Investor Overview. ARC Document Solutions assists design and construction professionals

For more than 100 years, we used print as a medium...

…today we use the cloud and mobile devices.

3

Page 4: Investor Overview - s2.q4cdn.coms2.q4cdn.com/.../overview/160525-Q1-ARC-Investor-Overview.pdf · Investor Overview. ARC Document Solutions assists design and construction professionals

We believe cloud and mobile technology will transform the way the construction industry distributes documents and information, dramatically increasing its speed and efficiency.

Driven by our extensive industry knowledge and experience, more than 200 technology professionals at ARC’s technology centers are developing solutions

specifically to address the construction industry needs.

ARC Document Solutions has invested over a $100 million in R&D over the past decade.4

Page 5: Investor Overview - s2.q4cdn.coms2.q4cdn.com/.../overview/160525-Q1-ARC-Investor-Overview.pdf · Investor Overview. ARC Document Solutions assists design and construction professionals

5

Our clients include tens of thousands of companies throughout the industry,including exclusive document management agreements with 22 of the Top 100 design, engineering and construction firms in the U.S.

And thousands more…

Page 6: Investor Overview - s2.q4cdn.coms2.q4cdn.com/.../overview/160525-Q1-ARC-Investor-Overview.pdf · Investor Overview. ARC Document Solutions assists design and construction professionals

6

Project Documents

…involving architectural, engineering and design drawings and documents,

largely involving plans and specifications.

Archived Documents

…related to all aspects of business, including project documents, specialized use

documents, and office documents.

Office Documents

…related to business management and administration such as financial,

contractual, compliance, marketing, HR, and other activities.

Key Areas of Document Management3

Page 7: Investor Overview - s2.q4cdn.coms2.q4cdn.com/.../overview/160525-Q1-ARC-Investor-Overview.pdf · Investor Overview. ARC Document Solutions assists design and construction professionals

7

Solutions to Facilitate Communication3Construction Document

& Information ManagementCDIM

Managed PrintServicesMPS

Archive & InformationManagement

AIM

Page 8: Investor Overview - s2.q4cdn.coms2.q4cdn.com/.../overview/160525-Q1-ARC-Investor-Overview.pdf · Investor Overview. ARC Document Solutions assists design and construction professionals

CDIM Solutions

PROFESSIONAL SERVICES

• Outsourced document management • Hyperlinking services• BIM services and support• Integrations with third-party software • Customized BI reports and analytics• Migration of projects from third-party software • Data segregation - Separate storage • Custom branding• Model creation for all or single trades MEP/FP• Clash detection and collision reports• …and more

HARDWARE

• SmartScreens• Tablet Computers• Plotters• MFD’s• Scanners• 3D Printers

Project Communication & Distribution • Project Information ManagementDocument Management & Reproduction • Global Document Distribution

SOFTWARE

C O M P O N E N T S O F E A C H S O L U T I O N3

Page 9: Investor Overview - s2.q4cdn.coms2.q4cdn.com/.../overview/160525-Q1-ARC-Investor-Overview.pdf · Investor Overview. ARC Document Solutions assists design and construction professionals

SOFTWARE

MPS SolutionsManaged Prints Services • Print Management • Print Cost RecoveryBusiness Analytics • Archive-As-You-Print • Reporting Dashboards

• Customized rules implementation• Customized software development• Customized integrations with third-party software • Customized dynamic BI reports and Analytics• Software installation & support• Fleet optimization• IT support and printer and driver management• …and more

PROFESSIONAL SERVICES

• SmartScreens• Tablet Computers• Plotters• MFD’s• Scanners• 3D Printers

HARDWARE

C O M P O N E N T S O F E A C H S O L U T I O N3

Page 10: Investor Overview - s2.q4cdn.coms2.q4cdn.com/.../overview/160525-Q1-ARC-Investor-Overview.pdf · Investor Overview. ARC Document Solutions assists design and construction professionals

AIM SolutionsArchiving & Information Management • Facilities Information Management

Compliance Information Management • Reporting Dashboards

• Analog-to-Digital Document Conversion• Cloud-based Archive & Retrieval• Archive Organization & Document Destruction• Workflow Automation & Implementation• Retention policy implementation • Customized software development • Customized integrations with third-party software • Customized BI reports & analytics• E-discovery & legal hold• …and more.

PROFESSIONAL SERVICES

• SmartScreens• Tablet Computers• Plotters• MFD’s• Scanners

HARDWARESOFTWARE

C O M P O N E N T S O F E A C H S O L U T I O N3

Page 11: Investor Overview - s2.q4cdn.coms2.q4cdn.com/.../overview/160525-Q1-ARC-Investor-Overview.pdf · Investor Overview. ARC Document Solutions assists design and construction professionals

11

• …provides technology and services that eliminate paper and printing from document management

• …delivers solutions that strip days and weeks from project schedules

• …makes legacy documents searchable and instantly accessible

• …reduces annual print costs per person from $250 up to $1,000

• …reduces all document-related costs by as much as 30%

ARC Document Solutions…

We save our largest customers millions of dollars per year.

Page 12: Investor Overview - s2.q4cdn.coms2.q4cdn.com/.../overview/160525-Q1-ARC-Investor-Overview.pdf · Investor Overview. ARC Document Solutions assists design and construction professionals

Financial Discussion

Page 13: Investor Overview - s2.q4cdn.coms2.q4cdn.com/.../overview/160525-Q1-ARC-Investor-Overview.pdf · Investor Overview. ARC Document Solutions assists design and construction professionals

13

CDIM MPS AIM~50% of Net Revenue 2015 Sales of $221mmAnnual YOY Growth of 1% 1Q16 YOY Sales Decrease of 2%Estimated gross margin: 37%-40%

~33% of Net Revenue2015 Sales of $144mmAnnual YOY Growth of 2%1Q16 YOY Sales Decrease of 7%Estimated gross margin: 32%-35%

~4% of Net Revenue2015 Sales of $13mmAnnual YOY Growth of 22%1Q16 YOY Sales Increase of 33%Estimated gross margin: 35%-38%

Equipment & Supplies(defensive)

~12% of Net Revenue2015 Sales of $50mmAnnual YOY Decline of -3%1Q16 YOY Sales Increase of 17%Estimated gross margin: 18%-21%

Page 14: Investor Overview - s2.q4cdn.coms2.q4cdn.com/.../overview/160525-Q1-ARC-Investor-Overview.pdf · Investor Overview. ARC Document Solutions assists design and construction professionals

14

General Sales Composition of Solutions

CDIM Traditional Repro (~50%) Color Imaging (~40%) Professional & Cloud

Services (~10%)

MPS Global Customers (~30%) Regional Customers (~10%) Local Customers (~60%)

AIM Digitization Services (~95%) Professional & Cloud Services (~5%)

Page 15: Investor Overview - s2.q4cdn.coms2.q4cdn.com/.../overview/160525-Q1-ARC-Investor-Overview.pdf · Investor Overview. ARC Document Solutions assists design and construction professionals

Revenue generation from new services beginning to offset slowly declining business from traditional reprographics

Roughly one-third of sales represent contract-based, recurring revenue from MPS

Experiencing double-digit revenue growth and new market opportunities in AIM

Gross Margins expand during periods when our mix is favorable, when we can leverage fixed costs and labor against revenue growth, and can benefit from targeted margin improvement exercises

Gross Margin

Revenue and Gross Margin Revenue ($mm)

$406 $407 $424 $429

$104.3 $103.6

$0

$100

$200

$300

$400

FY12 FY13 FY14 FY 15 1Q 15 1Q 16

30.4%

33.0%34.0%

34.6% 34.5%

32.6%

24.0%

28.0%

32.0%

36.0%

FY12 FY13 FY14 FY15 1Q15 1Q16

Page 16: Investor Overview - s2.q4cdn.coms2.q4cdn.com/.../overview/160525-Q1-ARC-Investor-Overview.pdf · Investor Overview. ARC Document Solutions assists design and construction professionals

16

(All figures in millions unless otherwise noted) 2012 2013 2014 2015 1Q '16 AnnualizedTraditional Repro YOY Sales Decreases $19.1 $10.2 $3.1 $4.1 $1.2 $5.0 New Services* YOY Sales Increases NA NA $0.8 $3.7 $1.0 $4.0

Traditional Repro % of Net Sales 30% 27% 25% 24% 24%New Services % of Net Sales NA 2.8% 2.8% 3.7% 4.2%

Notable Revenue Trends

CDIM Sales Trends• Traditional Reprographics declining slowly with adoption of technology• Color Imaging in demand in both construction and retail • SKYSITE®, BIM, Project Information Management, etc. gaining traction

MPS Sales Trends• Smaller account acquisitions in 2015 suppressed YOY growth rate• $10mm account did not renew in Dec 2015 putting pressure on 2016 MPS• Expect continued growth in local and regional accounts in 2016

Primary Sales Offsets by Business Line

AIM Sales Trends• Double-digit quarterly growth trend over last four quarters• New service prone to choppy growth due to startup nature

Equipment & Supplies Sales Trends• Subject to seasonal trends• International sales (China) highly influential• Defensive sales; non-strategic

* Includes cloud-applications, BIM/FIM/PIM services, and AIM services

Page 17: Investor Overview - s2.q4cdn.coms2.q4cdn.com/.../overview/160525-Q1-ARC-Investor-Overview.pdf · Investor Overview. ARC Document Solutions assists design and construction professionals

EBITDA grows from sales and gross margin improvements

Cash Flows grow from improved financial performance, deleveraging senior debt, and payment of minimal cash taxes due to approximately $83mm in NOL's

Adjusted Free Cash Flow* grew 15% year-over-year from $40.7mm in 2014 to $46.9mm in 2015 despite single-digit sales growth

Adjusted EBITDA ($mm)

* Adjusted Free Cash Flow calculated from Adjusted Cash Flow from Operations

EBITDA and Free Cash Flows

60.568.2 72.3 72.2

16.8 14.8

$0.0

$25.0

$50.0

$75.0

FY12 FY13 FY14 FY15 1Q15 1Q16

38.547.3

54.061.2

6.4 5.3

$- $10 $20 $30 $40 $50 $60

FY12 FY13 FY14 FY15 1Q15 1Q16

Adjusted CFFO ($mm)

FCF/shr $0.40 $0.63 $0.87 $0.99

18.1

29.1

40.746.9

3.0 2.8 $-

$10

$20

$30

$40

$50

FY12 FY13 FY14 FY15 1Q15 1Q16

Annual Adjusted Free Cash Flow & FCF/share

Page 18: Investor Overview - s2.q4cdn.coms2.q4cdn.com/.../overview/160525-Q1-ARC-Investor-Overview.pdf · Investor Overview. ARC Document Solutions assists design and construction professionals

18

Uses of Cash

(All figures in millions unless otherwise noted) 2013 2014 2015 1Q '16Total Debt $219.7 203.9 172.9 167.0Senior Debt 196.0 173.0 143.0 $137.1

Delevering/Senior Debt Reduction Senior Debt reduction of $58.9mm in nine quarters

Stock Repurchase Program est. Feb 2016• 700,000 shares repurchased in first quarter of 2016 at a purchase price of $2.7mm

• Plan authorizes the company to purchase up to $15 million of common stock through Dec. 31, 2017• The timing and amounts of any future purchases will be based on market conditions and other factors including price,

regulatory requirements, and capital availability• The company expects that the repurchase program will be funded by cash flows generated from its operations

Page 19: Investor Overview - s2.q4cdn.coms2.q4cdn.com/.../overview/160525-Q1-ARC-Investor-Overview.pdf · Investor Overview. ARC Document Solutions assists design and construction professionals

19

Twelve Months Ended Three Months EndedDecember 31, March 31,

(All dollar amounts in millions, except EPS) 2015 2014 2016 2015

Net Revenue $ 428.7 $ 423.8 $ 103.6 $ 104.3

Gross Margin 34.6 % 34.0 % 32.6 % 34.5 %

Net income (loss) attributable to ARC $ 97 $ 7.3 $ 2.6 $ 4.4

Adjusted net income attributable to ARC $ 16.8 $ 11.8 $ 2.7 $ 3.2

Diluted earnings (loss) per share $ 2.04 $ 0.15 $ 0.05 $ 0.09

Adjusted diluted earnings per share $ 0.35 $ 0.25 $ 0.06 $ 0.07

Cash provided by operating activities $ 60.0 $ 50.0 $ 5.3 $ 5.3

Adjusted cash provided by operating activities $ 61.2 $ 54 $ 5.3 $ 6.4

Adjusted EBITDA $ 72.2 $ 72.3 $ 14.8 $ 16.8

Capital Expenditures $ (14.2 ) $ (13.3 ) $ 2.5 $ 3.5

Debt & Capital Leases (including current) $ 173 $ 204 $ 167 $ 198

Financial Highlights from 2015 & 1Q 2016

Page 20: Investor Overview - s2.q4cdn.coms2.q4cdn.com/.../overview/160525-Q1-ARC-Investor-Overview.pdf · Investor Overview. ARC Document Solutions assists design and construction professionals

20

2016 Annual Guidance

Earnings Per Share: $0.30 - $0.35Cash from Operations: $55mm - $60mmEBITDA: $66mm - $71mm

2015 Key Metrics (in millions unless noted)

Revenue: $428.7Gross Margin: 34.6%Adj. EPS: $0.35Adj. EBITDA: $72.2Adj. CF from Ops: $61.2CapEx: $14.2Shares O/S: 47,532,000

For further information, please contact David Stickney, ARC’s VP of Corporate Communications & IR at 925-949-5114