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ARC Document Solutions, Inc. (ARC), a leading document solutions provider to design, engineering, construction, and facilities management professionals, today reported its financial results for the fourth quarter and full year ended December 31, 2018.
Management Commentary
"ARC delivered overall revenue growth of 1.6% for 2018, driven by more than a 3% increase in sales from CDIM," said K. "Suri" Suriyakumar CEO of ARC Document Solutions. "Considering that our primary strategic objective has been to protect print revenue in the face of declining volume, driving company-wide sales growth from print with the help of our technology initiatives is a remarkable achievement. We also capitalized on our growth by posting significant year-over-year improvements in gross margin, beating our own estimates for cash flow from operations and exceeding our earnings per share expectations."
"Our performance also contributed to ARC achieving its target of annual adjusted EBITDA of $53.4 million despite our higher-than-usual medical costs," Mr. Suriyakumar continued. "Absent those expenses for the year, annual adjusted EBITDA would have been nearly $3 million higher than our 2017 results. I'm very proud of our team."
"Essentially, we did exactly what we planned to do, and ARC's annual and quarterly performance demonstrated our success," said Jorge Avalos, Chief Financial Officer for ARC Document Solutions. "We've delivered our third consecutive quarter of revenue growth, and our second consecutive quarter of adjusted EBITDA growth. Cash flow from operations for the quarter grew by $9.3 million, and EPS of four cents for the quarter contributed to our strong annual performance. With the additional debt reduction of $5 million during the quarter, we also continued to improve our capital structure."
2018 Fourth Quarter Supplemental Information:
Net sales were $98.4 million, a 1.3% increase compared to the fourth quarter of 2017.
Architectural, engineering, construction and building owner/operators (AEC/O) customers comprised approximately 79% of our total net sales, while customers outside of construction made up approximately 21% of our total net sales.
Total number of MPS locations at the end of the fourth quarter has grown to approximately 10,500, a net gain of approximately 400 locations over Q4 2017.
Adjusted EBITDA excludes loss on extinguishment and modification of debt, goodwill impairment, and stock-based compensation expense.