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ARC ARC Document Solutions

Participants
Suri Suriyakumar Chairman, President and CEO
Dilo Wijesuriya COO
Jorge Avalos CFO
David Stickney VP Corporate Communications and IR
Alan Weber Robotti Advisors
Call transcript
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Operator

Good day and thank you for standing by. Welcome to the ARC Q2 2021 Earnings Report. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions]. to Stickney, conference Relations. VP like speaker to now David today, Communications would hand over the your I and Investor go ahead. Please

David Stickney

Thank welcome and you, everyone. Jerome,

Suri Chief On our Chief Financial and today with the our are call Jorge Avalos, CEO; Officer, Operating our Officer. Dilo Wijesuriya; me Suriyakumar,

disclosures CEO, Private only of actual our XXXX. differ Securities uncertainties XXXX, and of and as Litigation results Act on provisions highlight we statements advance site Please today not Document that today, call. Investor to provide and and X, quarterly of result a based of ir.e-arc.com. second fall materials other supplemental that shareholders be as materially at Our disclosures predictions earlier the August Reform are and are results risks call. may Solutions This Relations will release. analysts Safe statements announcement, press reconciled in Suriyakumar. our available today's forward-looking I’ll with certain on expanded note Such additional within information XXXX the for a quarter references that also of will information measures, which Suri our Suri? the pages call accompanying ARC quarterly and on non-GAAP The Web are publicized turn now Chairman, are filings. from contain in and Form our SEC earnings read in annual President release offered call today's press filing. today's to and today's were our largely in in call press In X-K to Harbor historical The contain release conference will over ARC

Suri Suriyakumar

year. same were over quarter, the increase a Thank in net last you, producing sales the up segment every for and second David, everyone. welcome X% sales period ARC

continuation appears be so gross On EPS services. activity a of adjusted did demand the the With as what the saw our pandemic in and This margin, up in also economic in improvements to behind we of for performance anticipated, and the developing we back of trend March. us, was, strength EBITDA. sales, posted we increase this worst picked

of accounted customers circumstances, opening While some has AEC focus their our North the new attribute our economic diversifying new America the market for existing across brought market. our in Meanwhile, of their we on majority employees, the can vitality success specifically certainly for more our to offices businesses business. the again to reopening has improving

plans is have construction materials, some constraints labor cost While not down. regarding with to and forward struggling the slowed move of

months seen AIA’s associations As a point, since consecutive positive scores Index indices Recession other from experienced and in case before not optimism. expressing the similar the recently of and are Great trade Architectural Billing surveys

the continuing outside rest and the opportunities by of year, customers, a both supported growing forward of Looking economy. the from inside we vertical, construction to anticipate

major is being The way, in new holidays. well setbacks against progress as that the push the stay seasonal marketing think may it typical proposals ahead. approach in and quotes optimism needs, past to will year. with to rough Of they override quarters the accelerate to strong it ground fight in normal made will and challenge that of to COVID-XX, into be benefit slow the business volume large to targeting up Barring of converting as we make economic the and desire expect their the in the Our note, and the down we expressed from customers, and have don't play we believe we a a have trends role sales. higher

opportunistic program performance expect, our as also supports value repurchase. return our shareholder would strong well quarterly primarily commitment -- stock as our via to you to value dividend As shareholder

further discussion, the detail. of announced With of this to quarter share per basis Dilo? turn $X.XX now further call November on we week, Just last broad I'll fourth for Shareholders the receive provide sketch XXXX. dividend Dilo XX. our as over will to a

Dilo Wijesuriya

Thank After from for that quarter our quarter with year, two. one the period to slow accelerated you XX.X% to activity top share pleased I'm grew a start by our you, line Suri. throughout the

new response printing services, grow Environmental entertainment delivered EBITDA work. for $XX flow quarter We to sales $XX marketing and won color adjusted our QX, to retail, ourselves. education scanning than and set targeted customers, specialty in explored continue markets, of produced million also well We graphics, in outstanding all for the new digital and new initiatives. more hunted for we per above million

up and COVID-related plenty much regions there of to did contribute our But the see Sales in to was are our While we activity expansion not increased Canada as the thanks continue these in customers we ahead. strict the to to sales hope lockdowns. due UK improved construction them quarter, the months during of grow, and opening non-construction U.S. the services. speak, to and from

us wallet Our their of construction ability a printing architects time industry to to high. helping sell general share more construction than at healthy and larger contractors, is just to backlogs when are capture engineers is and plant optimism a

XX% in new is call, coming customer acquisition of discussed from around we prior As the our non-AEC customers.

print an been has grow new media these customer return employees on and will this focused with segment campaigns e-marketing exposing office. verticals services continue and many our in to customer work verticals. print social new as team marketing to opportunities document in to Digital digital Our

cost Today, For a smaller see scanning their the operations than are we those sales the consolidate tremendous and digitizing was is pandemic. efficiency increased expanding are document. structure, offices, demand. our paper grow busy by it to we to to business our a opportunity to our centers looking accommodate prior Thanks to AIM their force and scan better our customers more

to to without our learned profitable develop demand. adding more increased new have headcount. expect we on to support ARC how We Likewise, to don't infrastructure and more relationships and customers attract spend

efficiently. infrastructure As to this opportunities, improved inventory and more managing we labor, in addition management costs team by demonstrate our sales increasing material, our growing quarter, margins our and

of been of our efficiency benefit our operation increasing chain. Another the smooth has supply

to on our and practices results material At management supplier to sidestep supply time, coming shortages. relationships impact an chain We issues help inventory inflation don't flexible in this we the or have quarter. with expect us have excellent our

As the emerged have as company a Suri said after pandemic. different we previously,

continue will to time, efficient operate will Jorge? customers We over solutions’ Jorge this an document hand I deliver our company. financial as At print technology-driven and review. the to good value a and call for to

Jorge Avalos

Dilo. you, Thank

The year-over-year As to changes both we XXX our drove expected, permanent growth of and profit, the $X.X million quarter quarter. the points cost in million our million to increase pandemic, gross compared $XX.X impressive and in gross $X.X with the made million the first $X XXXX. the up for structure, compared sales combined same margin to increase revenue we a of in prior basis XXXX up delivered period in during

to the last net quarter, flows ratio the structure debt the structure, April. leverage in we quarter benefit second of this EBITDA the bigger the drop cost our strengthened half from adjusted the manage in sales I the operations the year. of EPS temporary what and quarter, reflect a was the quarter we of working both Cash in it cyclical and were on cycle, of refinancing and As the structure CAC not typical second height made exerts announced growth, capital the coupled flows increase especially deal by the year. LIBOR. benefits we thanks wage usual year significant of of see EBITDA in reductions build was continue an we interest, saw our for At efficiency impact release, half year, in and We considering with today's our noted did year. from they cost powered second took Per was sustainable adjusted first second lower more expect on build X.XX that a and sales to aggressive $X.XX, to future, were end our increase pandemic. capital we our and $XXX,XXX. EPS an Instead, in to at due cost the cash to free the debt last further to measures The primarily believe in normalized provide or will from the the in in double period last is leverage press in other of our consistent the we the reductions

the where When potential our stock current stock dividend returned there Suri program million in shareholders As to we we and strong of via shares sale for sales great be model come fourth our to at business returning will new last employees to purchases flows dollar plan, construction investors mentioned, AKC November, to the have has color of add a $X the line our momentum over we and in paid With will cost repurchased expect. new for beginning resilient. in bottom we growth is from million optimized continue every week. year work, of markets, repurchase generate structure, the to offices. the point and and in announced performance, proven drive our have to the have XXXX. is with leverage Since cash sound dynamic both XXXX. The X XXX,XXX

our place through one we be that, our to halfway to an With Suri? turn company return the are continue to for I'll Our needs a low It's better Suri. value call and investors. for capital shareholders. and good even the to the back year,

Suri Suriyakumar

and listeners' Operator, ready you, Jorge. any Thank we for questions. now are available

Operator

Instructions]. you. [Operator Thank

question from comes the investor. Harmon line an Alex first individual of Your [ph],

open. now is line Your

Unidentified Analyst

you. Thank

So my question basically is question. a capital allocation

balance steady the getting business business for cash of about market with buys that a generates cash $X the share on wondering year. buyback. on couple I'm a the basically of your $X anybody then have Basically and and pretty balance stock getting today, just $X $X sheet. the guys basically value you're -- a last for getting You a that you're been million they’re is sheet why It's $XX more aggressive not years.

more think out get had results. that not there an why there's So I acquisition similar aggressive? candidate

to You pretty buy out would be probably looking quickly. them

that? your Just thoughts on Thanks.

Suri Suriyakumar

you take would to question? that Jorge, like

Jorge Avalos

of repurchases, it. pretty that could look stock as we to we've at in that open our When of buy what the aggressive extent allowed do we buy. market. Obviously, definitely guidelines we aware we're much present opportunities and To our as willing we're repurchase, the could Sure. SEC themselves accelerate you're to flow been that

Unidentified Analyst

looked you maybe doing or like Have something guys like that? offer tender at a

Jorge Avalos

purchase coming XX% something we a the tender stock know, current is offer, we're do to that's would of That the to at upwards well when we do be looking back. of as for state, this time, think a pandemic At the in XX% of had we're stage At or you at. you to prudent of a a still thing and in have don't somewhere you company's looked company. middle pandemic, out this

Unidentified Analyst

a It seems that. like lot you in, guys built of stuff cushions got like

especially to you. Thank something thoughts. be might my just that's we're now it but consider again, along, that So further

Suri Suriyakumar

Thank you.

Operator

[Operator you. Thank Instructions].

question of Robotti comes Your next of from Weber Alan line the Advisors.

line is now Your open.

Alan Weber

Good How afternoon. are you?

Suri Suriyakumar

you? are How Alan. good, Very

Alan Weber

Good.

you about Can question. quick or give a talk can are revenues the from Just color? you what

Suri Suriyakumar

Sorry, Alan.

Alan Weber

color. For

Suri Suriyakumar

yes. Okay,

Alan Weber

the and last are and that? over like revenues What compared year sequentially and

Suri Suriyakumar

of almost break don't Jorge, out, But services. total the is color We typically XX%? is revenue our color part color CDIM about because

Jorge Avalos

roughly. at probably roughly we're now, Yes, way The CDIM. we to about XX% it In to of XX% of the Right CBM’s CDIM. closer past, XX% XX% to it XX%. was look is

revenue it can drive center, So be look how how service at white, look that the to color? color black it we there. we see much disclose traction much Dilo the how perspective definitely at could we a the separately, drive and So company total from a sales as service to is revenue, mentioned, we be it don't center. on because we much printing do it But way we

Alan Weber

question. only you my was That very Okay. Thank much.

Suri Suriyakumar

Thank right. All you.

Operator

are at this you. no questions There time. Thank further

Turning to you, David. back over

David Stickney

again thanks look and we and afternoon. everyone attention care We participation forward interest to your Take and your and for you have the soon. in this talking your Jerome, a continued evening. good to with company, Thanks, appreciate

Operator

call. concludes participating. Thank today's This conference you for

may now disconnect. You