American Reprographics Reports 31.8% Gross Margin in 2011
Wednesday, February 22, 2012
Press release from the issuing company
ARC (NYSE: ARC), the nation's leading document solutions company for the architecture, engineering, and construction (AEC) industry, today reported its financial results for the full year and fourth quarter ended December 31, 2011.
-- Strong signs of a moderating revenue decline due to stabilizing AEC market, expansion into adjacent markets and other diversification efforts.
"Our results for the full-year were in line with our expectations and once again provided ample evidence of our ability to perform in the midst of economic and industry uncertainty," said K. "Suri" Suriyakumar, Chairman, President and CEO of ARC. "While we were gratified to see what appears to be a mitigation of the construction industry's down cycle over the past three years, our efforts to diversify into adjacent and growing markets delivered results that were truly noteworthy. Large-format color revenue grew 10.3% year-over-year, largely from our Riot Creative Imaging business. The fourth quarter also saw growth of 13.5% in our FM/MPS service line, and our annual growth in this area exceeded 11%."
Mr. Suriyakumar continued, "By developing our MPS service line, we are simultaneously reducing our revenue exposure to the cyclical nature of construction activity and expanding our client service capabilities in our core AEC market. These companies must conduct their day-to-day business regardless of how many construction projects they have. Our MPS solution addresses those needs perfectly by improving efficiency and reducing the costs associated with document management and fulfillment. We believe this will better demonstrate the value and breadth of our document solutions, and strengthen our client relationships."
CFO John Toth commented, "In addition to diversifying our product offerings, we added tremendous flexibility to our capital structure by replacing our previous $50 million revolver with a far less restrictive, low-interest, non-monitored, asset-supported credit facility. Our cash from operations continued to remain very healthy at nearly $50 million for 2011 and has returned more than 16% of our current stock price. With regard to cost controls, our 'Stay Fit' plans removed more than $16 million from our cost structure in 2011. With these financial accomplishments and a powerful brand position thanks to our consolidation efforts over the past year, we are very well positioned for success in 2012."
ARC management expects a mitigated decline in private non-residential construction activity in 2012, incremental growth in MPS services, the addition of new Global Solutions accounts, and improvement in other non-AEC service lines less exposed to the cyclical nature of construction projects.
While these assumptions are subject to change as the year progresses, ARC anticipates annual adjusted earnings per share in 2012 to be in the range of $0.05 to $0.10 on a fully-diluted basis, and annual cash flow from operations to be in the range of $40 million to $50 million.
Teleconference and Webcast:
ARC 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 fourth quarter and fiscal year 2011. The conference call can be accessed by dialing 877-402-8179. The conference ID number is 45393925.
A live Webcast will also be made available on the investor relations page of ARC's website at www.e-arc.com.
A replay will be available approximately one hour after the call for seven days following the call's conclusion. To access the replay, dial (855) 859-2056. The conference ID number to access the replay is 45393925. A Web archive will be made available at http://www.e-arc.com for approximately 90 days following the call's conclusion.
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