This document provides an overview of ARC Document Solutions, a document solutions company focused on the architectural, engineering and construction (AEC) industries. It summarizes ARC's three main document solutions - Construction Document and Information Management (CDIM), Managed Print Services (MPS), and Archive and Information Management (AIM). CDIM, MPS, and AIM are cloud-based platforms that help reduce costs and improve efficiency for AEC customers by reducing paper usage and providing digital/mobile access to documents. The document highlights ARC's growth strategy of focusing on recurring revenue streams, margin expansion, and deleveraging debt through 2020.
2. As a document solutions company
our goal is to improve efficiencies
and reduce costs wherever our
architectural, engineering and
construction (AEC) customers’
documents exist.
3. We have a relentless focus on
reducing the use of paper,
improving document workflow,
and providing instant access to
our customers’ documents anywhere,
anytime, and in any form.
4. 4
We believe the cloud and mobile technology
will transform document management and
communications in the AEC industry.
5. 5
We can deliver documents
and information with secure
mobile access anywhere,
anytime and to any device.
6. 6
Project
Documents
…involving architectural,
engineering and design
drawings and documents,
largely involving plans and
specifications.
Archived
Documents
…related to all aspects
of business, including project
documents, specialized use
documents, and office
documents.
Office
Documents
…related to business
management and administration
such as financial, contractual,
compliance, marketing, HR, and
other activities.
7. 7
• …average annual print cost per person is
$2,500 to $3,500
• …document-related costs
are the third largest office expense after people
and locations
• …printing project documents
typically costs twice as much as managing
documents digitally
• …delays from document organization
errors increase project schedules by days and
sometimes weeks
• …the majority of document storage
boxes are left untouched on the shelf for 16 years
For most of our customers…
8. 8
ARC Developed Three Document Solutions
CDIM
Construction Document
& Information Management
MPS
Managed Print
Services
AIM
Archive & Information
Management
9. 9
• …reduces annual print costs per
person from $250 up to $1,000
• …reduces all document-related
costs by as much as 30%
• …provides technology and services that
eliminate paper and printing from document
management
• …deliver solutions that strip days and weeks
from project schedules
• …makes all legacy documents
searchable and instantly accessible
ARC Document Solutions…
We save our largest
customers millions of
dollars per year.
10. 10
CDIM
Construction Document
& Information Management
Primary Technology
• SmartScreens
• Tablets
• Web-enabled Printers
• Multi-Function Printers
• Scanners
Equipment & Hardware
• Hyperlinking
• BIM, File Conversion
• Color Production
• Onsite/Offsite print facilities
• Software Support
• Digital shipping
Supporting Services & Technology
CDIM is a suite of cloud-based tools and services
to manage and distribute construction documents
and improve the efficiency of construction teams.
11. 11
• Multi-Function Devices
• Large Format Printers
• SmartScreens
• 3D printers
Equipment & Hardware
• Mail Room
• Onsite Staffing
• Software Installation &
Support
• Offsite Overflow Printing
• 3D Modeling
Supporting Services & Technology
MPS
Managed Print Services
Primary Technology
MPS is an outsourced printing environment that
reduces costs and improves the efficiency of office
document management and production.
12. 12
• Scanners
• SmartScreens
• Web-enabled
Plotters
Equipment & Hardware
• Onsite/Offsite Scanning
• Hardcopy/Box Pickup & Delivery
• Document Retention &
Information Governance
Consulting
• Financing
Supporting Services & Technology
AIM
Archive & Information
Management
Primary Technology
AIM is a cloud-based archival platform that captures
documents of any size or type, with powerful search
tools to make legacy information available instantly.
13. 13
CDIM AIM
A single location
where all documents,
and all information…
…are available anytime,
anywhere, on
any device.
MPS
14. 14
Solutions are Unique to ARC
AEC-specific
Disruptive
Unprecedented value
Create efficiencies
Rooted in our industry
expertise
Solutions Address All Clients
Architects & Designers
Engineers
Industry-specific
General/Sub-Contractors
Multi-national
Local & Regional
ARC has exclusive document management agreements with
22 of the Top 100 AEC firms in the U.S.
15. 15
Solutions are Interconnected
MPS, AIM & CDIM share
infrastructure on the
Amazon Cloud
Share equipment
Can be sold separately,
but offer tremendous
cross selling
opportunities
Solutions are Global
Cloud-based services
release ARC from
geographical limits,
but…
Service center footprint
of 199 locations
provides enormous
competitive advantage
16. ARC has transformed to a new and growing business with a bigger
addressable market, and a better value proposition for the future
Annual recurring revenue now represents 34% of net sales via
MPS, and is expected to grow with new revenue lines
Management team of experienced, entrepreneurial veterans sensitive
to future needs
Better growth, margins and cash potential in the future
Stock is undervalued given we are at the beginning of a
non-res recovery cycle, and there is a lack of awareness
of ARC’s transformation
2014 performance is clear evidence of ARC’s direction and its
opportunities
Investment Opportunity
18. 18
CDIM MPS AIM
52.4% of Net Revenue in Q1 15
YOY Growth of 2.4%
Sales of $54.6mm in Q1 15
Estimated gross margin: 37%-40%
34.4% of Net Revenue in Q1 15
YOY Growth of 8.7%
Sales of $35.9mm in Q1 15
Estimated gross margin: 32%-35%
2.7% of Net Revenue in Q1 15
YOY Growth of 8.6%
Sales of $2.8mm in Q1 15
Estimated gross margin: 35%-38%
Equipment & Supplies
(defensive)
10.5% of Net Revenue in Q1 15
YOY Decline of 3.9%
Sales of $11mm in Q1 15
Estimated gross margin: 18%-21%
19. Revenue growth in MPS and stabilizing non-res construction
Gross Margins grow by leveraging fixed costs against revenue growth and targeted margin
improvement exercises
EBITDA grows from sales and gross margin improvements
Cash Flows grow from improved financial performance, deleveraging senior debt, and
payment of minimal cash taxes due to approximately $85mm in NOL's
Free Cash Flow grew 40% YOY from $29.1mm in 2013 to $40.7mm in 2014*
Adjusted EBITDA ($mm)
15.9 16.1
18.3
20.9
16.6
18.3 17.4 17.0 16.1
16.8
$0.0
$3.0
$6.0
$9.0
$12.0
$15.0
$18.0
$21.0
Q1
'13
Q1
'14
Q2
'13
Q2
'14
Q3
'13
Q3
'14
Q4
'13
Q4
'14
Q1
'14
Q1
'15
$100$100
$105
$109
$101
$107
$101
$107
$100
$104
$90
$95
$100
$105
$110
Q1
'13
Q1
'14
Q2
'13
Q2
'14
Q3
'13
Q3
'14
Q4
'13
Q4
'14
Q1
'14
Q1
'15
32.4%
33.8%34.0%
36.0%
32.5%
33.9%33.0%
32.5%
33.8%
34.5%
24.0%
28.0%
32.0%
36.0%
Q1
'13
Q1
'14
Q2
'13
Q2
'14
Q3
'13
Q3
'14
Q4
'13
Q4
'14
Q1
'14
Q1
'15
Revenue ($mm) Gross Margin
Financial Leverage
* Free Cash Flow calculated from Adjusted Cash Flow from Operations
20. 20
Revenue grew 3.9% year-over-year
Gross margin was 34.5%, a year-over-year increase of 70 basis points
Adjusted cash flow from operations was $6.4 million vs. $8.1 million in Q1 2014; decrease largely due to timing of accounts
receivable collections
Adjusted EBITDA of $16.8 million; grew 4% in line with sales despite planned investments in SG&A
Maintained 2015 fully-diluted annual adjusted earnings per share projected to be in the range of $0.37 to $0.41; annual
adjusted cash provided by operating activities projected to be in the range of $61 to $66 million; and annual adjusted
EBITDA to be in the range of $75 million to $80 million
Q1 2015 Performance Update Three Months Ended
March 31,
(All dollar amounts in millions, except EPS) 2015 2014
Net Revenue $ 104.3 $ 100.4
Gross Margin 34.5% 33.8%
Net income attributable to ARC $ 4.4 $ 1.4
Adjusted Net Income attributable to ARC $ 3.2 $ 1.8
Earnings per share - Diluted $ 0.09 $ 0.03
Adjusted earnings per share - Diluted $ 0.07 $ 0.04
Adjusted EBITDA $ 16.8 $ 16.1
Adjusted Cash provided by operating activities $ 6.4 $ 8.1
Capital Expenditures $ (3.5) $ (3.6)
Debt & Capital Leases (including current) $ 200.2 $ 216.4
21. 1.) Margin Expansion
2.) Deleveraging
4.) Transformation
3.) Revenue Growth
Restructure MIM & Consol. Rev. Growth MPS & Mix Shift
Refinance Senior Debt Continue to Pay Down Debt…
Organic Growth New Business Cycle Recovery
Growth in Technology Services
2013 2014 2015 2016-forward
• Strategic customer relations, not transactional
• Make customer better at what they do
• Long term vs. short term
• Recurring revenue
Value Drivers of ARC
22. Thank you for your interest.
For further information, please contact David Stickney,
ARC’s VP of Corporate Communications & IR at 925-949-5114
Editor's Notes
Talking points:
Very important page that highlights that customers are loyal and generate incremental business over time
The pie-chart should be a compelling selling point that a majority of revenues are now contracted, which will give investors comfort around projections