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American Reprographics Company reports results for Q2; seeing new business

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 second quarter ended June 30, 2010.

"We continue to manage our business aggressively, knowing the market conditions are likely to remain difficult throughout the year," said Mr. K. "Suri" Suriyakumar, Chairman, President and CEO. "We are scrutinizing our infrastructure, eliminating additional overhead costs as required, and pursuing opportunities in the marketplace with expanded offerings and new initiatives. While the construction market has not experienced some of the incremental improvements we've seen in the general economy, this is an opportune time to be addressing the productivity and efficiency our customers can achieve by using our services and technology."

Net revenue for the second quarter of 2010 was $115.1 million. The Company's gross margin was 34.3% for the three-month period ending June 30, 2010. Net income for the second quarter of 2010 was $1.7 million or $0.04 per diluted share.

Net revenue for the first six months of 2010 was $227.3 million. The Company's gross margin was 33.6% for the six-month period ending June 30, 2010. Net income for the first six months of 2010 was $2.4 million, or $0.05 per diluted share.

Jonathan Mather, Chief Financial Officer, said, "We are seeing revenue stabilization in key service lines relative to the large quarterly declines we saw in 2009. For example, large-format black and white printing revenues have remained essentially flat from first to second quarter. We saw an encouraging portion of new business in the U.S. is coming from our sales efforts in color, and once again, China had a strong quarter in equipment and supplies sales. While equipment sales can have a dilutive effect on our gross margin, quarter two gross margin improved from the first quarter by 140 basis points."

The Company reaffirmed its 2010 annual EPS forecast of $0.15 to $0.30 on a fully-diluted basis, projecting annual cash flow from operations in the range of $65 million to $80 million. Management noted, however, that the Company's annual performance is likely to be on the lower side of its forecast for both EPS and cash flow from operations.