American Reprographics posts losses for Q4
Wednesday, February 23, 2011
Press release from the issuing company
Walnut Creek, CA - American Reprographics Company, the nation's leading provider of reprographic services and technology, today reported its financial results for the full year and fourth quarter ended December 31, 2010.
"Our focus for 2010 was to generate strong cash flows from operations, aggressively reduce costs, and maintain a healthy capital structure. We were successful on all fronts," said K. "Suri" Suriyakumar, Chairman, President and CEO of American Reprographics Company. "While revenue for the year was lower than expected, the economy continues to show signs of recovery and industry opinion seems clear that we are at the bottom of the cycle. However, non-residential construction continues to lag the general economy, and as recently as December, industry spending was at its lowest level in a decade. Therefore, we can expect the road to recovery to be bumpy, especially during the first half of 2011."
"Yet that recovery opens up tremendous opportunities for the company. With a dominant position in the industry, significant operating leverage, strong cash flows and a stable capital structure, we are well-positioned to take advantage of growth in our end markets. In addition, our industry-leading technology solutions combined with the lower cost base we currently enjoy will allow us to augment our EBITDA margins. I remain confident in the health and strength of ARC, and its ability to thrive as the U.S. economy comes back."
Revenue for the year ended December 31, 2010 was $441.6 million, compared to $501.5 million for the year ended December 31, 2009, an 11.9% decline year-over-year. The Company's gross margin for the year ended December 31, 2010 was 32.2%, compared to 35.5% for the year ended December 31, 2009. Adjusted net income for 2010 was $1.3 million, or $0.03 per diluted share, excluding the net effects of the Company's goodwill impairment charge, the amortization impact related to the change in trade name as we consolidate various brands across our operating footprint, and the loss on early extinguishment of debt and interest rate swap related costs. Adjusted net income for 2009 was $17.2 million, or $0.38 per diluted share excluding the net effect of charges related to the Company's 2009 goodwill impairment charge, an impairment of long-lived assets, and costs associated with the 2009 amendment to our then-existing credit agreement and interest rate swap transaction. Net cash from operating activities in 2010 was $53.9 million, compared to $97.4 million in 2009.
Net revenue for the fourth quarter of 2010 was $105 million, compared to $111.7 million for the fourth quarter of 2009, a decrease of 6%. Gross margin for the fourth quarter of 2010 was 29.5%, compared to 32.2% for the same period in 2009. The Company reported an adjusted net loss for the fourth quarter of 2010 of $1.5 million, or $0.03 per diluted share, which excluded accelerated trade name amortization, loss on early extinguishment of debt and interest rate swap related costs referenced above. This compares to adjusted net income for the fourth quarter of 2009 of $0.4 million, or $0.01 per diluted share, excluding the charges and costs in the fourth quarter of 2009, as noted above.
"The past four years of construction declines have challenged us at every turn, but they have forced us to be more agile and prepared than we have ever been at any point in our history. As such, our forecast is conservative but realistic for 2011, and I remain very confident in our ability to ride out the peaks and valleys we are likely to experience as our economy recovers."
American Reprographics Company anticipates annual adjusted earnings per share in 2011 to be in the range of $0.01 to $0.15 on a fully-diluted basis, and annual cash flow from operations to be in the range of $40 million to $60 million.
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