WALNUT CREEK, CA, Nov 01, 2007 - American Reprographics Company, the nation's leading provider of reprographics services and technology today announced financial results for the three months ended September 30, 2007.
The Company reported net revenue for the third quarter of 2007 of $176.2 million, compared to $152.5 million in the third quarter of 2006, an increase of 15.5%. The Company's gross margin for the third quarter was 41.2% compared to 43.9% in the same period in 2006, due largely to the temporary dilutive effects of three large acquisitions completed earlier in the year, and the lack of absorption in labor and overhead costs due to lower quarterly sales volume. Net income for the second quarter of 2007 was $15.9 million, or $0.35 per diluted share. This compares to net income for the third quarter of 2006 of $15.8 million, or $0.35 per diluted share.
Revenue for the first nine months of 2007 was $514.2 million, compared to $444.9 million for the same period in 2006. Net income for the first nine months of 2007 was $52.4 million, or $1.14 per diluted share, compared to net income of $38.6 million, or $0.85 per diluted share for the first nine months of 2006. Adjusted to exclude the Louis Frey litigation charge in 2006, net income for the first nine months of 2006 was $46.8 million.
"The company continues to make strong progress on several fronts and our fundamentals remain strong," said K. "Suri" Suriyakumar, President and CEO of American Reprographics Company. "While our efforts to enhance sales are starting to show results they have not been adequate to counter the downturn on the residential front. Short-term results may be further aggravated by the recent fires in Southern California, the impact of which has yet to be determined. As a result, our growth will be less than anticipated for the rest of the year. Short-term concerns aside, our recently announced joint venture with Unisplendour in China, our marketing alliance with KIP, and the pace of our acquisition activity are just a few of the reasons I remain confident in our continued long-term growth."
Jonathan Mather, Chief Financial Officer, said, "We remain committed to positioning the company for continued growth. The Company is also taking steps to refinance our current debt which, among other expected benefits, would ease restrictions on our ability to consider a stock repurchase. Our discussions with various lenders have been uniformly positive and we anticipate completing a refinancing agreement by the end of the year."
2007 Outlook
American Reprographics Company is lowering its prior forecast for 2007 in anticipation of a weaker near-term construction market. Revenue is forecasted to be in the range of $682-$687 million. Earnings per share will be in the range of $1.42 - $1.46. The Company's previous forecast called for revenues in the range of $690-$710 million and earnings per share in the range of $1.58-$1.62.
Teleconference and Webcast
American Reprographics Company will host a conference call and audio webcast today at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) to discuss financial results for the third quarter ended September 30, 2007. The conference call can be accessed by dialing 201-689-8562.
A replay of this call will be available approximately one hour after the call for seven days following the conclusion of the call. This replay can be accessed by dialing 201-612-7415. The account number to access the phone replay is 3055 and the Conference ID number is 257452.
A Web archive will be made available at: http://www.e-arc.com for approximately 90 days following end of the call.