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Information is current to September 30, 2015 unless otherwise indicated
Investor Overview
As a document solutions company
our goal is to improve efficiencies
and reduce costs wherever our
architectural, engineering and
construction (AEC) customers’
documents exist.
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
We believe the cloud and mobile technology
will transform document management and
communications in the AEC industry.
5
We can deliver documents
and information with secure
mobile access anywhere,
anytime and to any device.
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
• …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
ARC Developed Three Document Solutions
CDIM
Construction Document
& Information Management
MPS
Managed Print
Services
AIM
Archive & Information
Management
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
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
Professional 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
• Multi-Function Devices
• Large Format Printers
• SmartScreens
• 3D printers
Equipment & Hardware
• Mail Room
• Onsite Staffing
• Software Installation &
Support
• Offsite Overflow Printing
• 3D Modeling
Professional 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
• Scanners
• SmartScreens
• Web-enabled
Plotters
Equipment & Hardware
• Onsite/Offsite Scanning
• Hardcopy/Box Pickup & Delivery
• Document Retention &
Information Governance
Consulting
• Financing
Professional 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
CDIM AIM
A single location
where all documents,
and all information…
…are available anytime,
anywhere, on
any device.
MPS
14
Solutions are Unique to ARC
 Construction-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 architectural, engineering and construction
firms in the U.S.
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 nearly 200 locations
provides enormous
competitive advantage
 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 33% of net sales via
MPS, and is expected to grow with new revenue lines
 Management team of experienced, entrepreneurial veterans sensitive
to future needs
 Continued growth in margins and free cash flows
 Strength in non-res recovery cycle provides opportunities to grow
our new solutions
Investment Opportunity
Financial Discussion
18
CDIM MPS AIM
~52% of Net Revenue
YOY Growth of 1%
YTD Sales of $168mm
Estimated gross margin: 37%-40%
~33% of Net Revenue
YOY Growth of 4%
YTD Sales of $109 mm
Estimated gross margin: 32%-35%
~3% of Net Revenue
YOY Growth of 22%
YTD Sales of $10mm
Estimated gross margin: 35%-38%
Equipment & Supplies
(defensive)
~12% of Net Revenue
YOY Growth of 1%
YTD Sales of $37mm
Estimated gross margin: 18%-21%
19
General Sales Composition of Solutions
CDIM
 Traditional Repro (~50%)
 Color Imaging (~40%)
 Professional & Cloud
Services (~10%)
MPS
 Global Customers (~35%)
 Regional Customers (~5%)
 Local Customers (~60%)
AIM
 Digitization Services (~95%)
 Professional & Cloud Services (~5%)
 Year-to-date revenue growth driven by MPS
sales, new digital offerings
 33% of sales are contract-based, recurring
revenue driven by MPS
 Experiencing double-digit revenue growth
and new market opportunities in AIM
 Gross Margins expanding by leveraging
fixed costs and labor against revenue
growth, and targeted margin improvement
exercises
Gross Margin
Revenue and Gross Margin Revenue ($mm)
$406 $407
$424
$316 $324
$200
$250
$300
$350
$400
$450
FY12 FY13 FY14 YTD14 YTD15
30.4%
33.0%
34.0%
34.6% 34.8%
24.0%
28.0%
32.0%
36.0%
FY '12 FY '13 FY '14 YTD '14 YTD '15
 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 $94mm in NOL's
 Adjusted Free Cash Flow* grew 40% year-over-year from $29.1mm in 2013 to $40.7mm in 2014
Adjusted EBITDA ($mm)
* Adjusted Free Cash Flow calculated from Adjusted Cash Flow from Operations
EBITDA and Free Cash Flows
60.5
68.2 72.3
55.2 56.2
$0.0
$25.0
$50.0
$75.0
FY '12 FY '13 FY '14 YTD '14 YTD '15
38.5
47.3
54.0
40.9 44.3
$-
$10
$20
$30
$40
$50
$60
FY '12 FY '13 FY '14 YTD '14 YTD '15
Adjusted CFFO ($mm)
FCF/shr $0.40 $0.64 $0.86 $0.66 $0.69
18.1
29.1
40.7
30.8 32.8
$-
$7
$14
$21
$28
$35
$42
FY '12 FY '13 FY '14 YTD '14 YTD '15
Annual Adjusted Free Cash Flow & FCF/share
22
 Adjusted diluted earnings per share were $0.09 vs. $0.06 in Q3 2014; adjustments include the reversal of more than $70 million of
a valuation allowance against certain of ARC's deferred tax assets as a result of the company's sustained profitability over the past
three years and forecasted continuing profitability
 Adjusted cash flow from operations was $21.0 million, a 23% increase over Q3 2014
 Gross profit was flat year-over-year, delivering a gross margin of 33.8%
 Sales of $106.4 million were flat year-over-year
 Adjusted EBITDA of $17.9 million fell 2% year-over-year
Q3 2015 Performance Update Three Months Ended Nine Months Ended
September 30, September 30,
(All dollar amounts in millions, except EPS) 2015 2014 2015 2014
Net Sales $ 106.4 $ 106.8 $ 324.1 $ 316.2
Gross Margin 33.8% 33.9% 34.8% 34.6%
Net income attributable to ARC $ 80.3 $ 3.7 $ 94.0 $ 9.6
Adjusted Net Income attributable to ARC $ 4.2 $ 2.9 $ 13.6 $ 9.2
Earnings per share - Diluted $ 1.69 $ 0.08 $ 1.98 $ 0.20
Adjusted earnings per share - Diluted $ 0.09 $ 0.06 $ 0.29 $ 0.20
Adjusted EBITDA $ 17.9 $ 18.3 $ 56.2 $ 55.2
Cash provided by operating activities $ 21.0 $ 15.3 $ 43.1 $ 37.0
Adjusted cash provided by operating activities $ 21.0 $ 17.0 $ 44.3 $ 40.9
Capital Expenditures $ 3.9 $ 3.4 $ 11.5 $ 10.0
Debt & Capital Leases (including current) $ 180.4 $ 205.6
23
2015 Annual Guidance
Earnings Per Share: $0.33 - $0.36
Cash from Operations: $58mm - $61mm
EBITDA: $70mm - $73mm
2014 Key Metrics (in millions unless noted)
Revenue: $423.8
Gross Margin: 34.0%
Adj. EPS: $0.25
Adj. EBITDA: $72.3
Adj. CF from Ops: $54.0
CapEx: $13.3
Shares O/S: 46,726,000
For further information, please contact David Stickney,
ARC’s VP of Corporate Communications & IR at 925-949-5114

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151124 arc investor overview

  • 1. Information is current to September 30, 2015 unless otherwise indicated Investor Overview
  • 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 Professional 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 Professional 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 Professional 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  Construction-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 architectural, engineering and construction 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 nearly 200 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 33% of net sales via MPS, and is expected to grow with new revenue lines  Management team of experienced, entrepreneurial veterans sensitive to future needs  Continued growth in margins and free cash flows  Strength in non-res recovery cycle provides opportunities to grow our new solutions Investment Opportunity
  • 18. 18 CDIM MPS AIM ~52% of Net Revenue YOY Growth of 1% YTD Sales of $168mm Estimated gross margin: 37%-40% ~33% of Net Revenue YOY Growth of 4% YTD Sales of $109 mm Estimated gross margin: 32%-35% ~3% of Net Revenue YOY Growth of 22% YTD Sales of $10mm Estimated gross margin: 35%-38% Equipment & Supplies (defensive) ~12% of Net Revenue YOY Growth of 1% YTD Sales of $37mm Estimated gross margin: 18%-21%
  • 19. 19 General Sales Composition of Solutions CDIM  Traditional Repro (~50%)  Color Imaging (~40%)  Professional & Cloud Services (~10%) MPS  Global Customers (~35%)  Regional Customers (~5%)  Local Customers (~60%) AIM  Digitization Services (~95%)  Professional & Cloud Services (~5%)
  • 20.  Year-to-date revenue growth driven by MPS sales, new digital offerings  33% of sales are contract-based, recurring revenue driven by MPS  Experiencing double-digit revenue growth and new market opportunities in AIM  Gross Margins expanding by leveraging fixed costs and labor against revenue growth, and targeted margin improvement exercises Gross Margin Revenue and Gross Margin Revenue ($mm) $406 $407 $424 $316 $324 $200 $250 $300 $350 $400 $450 FY12 FY13 FY14 YTD14 YTD15 30.4% 33.0% 34.0% 34.6% 34.8% 24.0% 28.0% 32.0% 36.0% FY '12 FY '13 FY '14 YTD '14 YTD '15
  • 21.  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 $94mm in NOL's  Adjusted Free Cash Flow* grew 40% year-over-year from $29.1mm in 2013 to $40.7mm in 2014 Adjusted EBITDA ($mm) * Adjusted Free Cash Flow calculated from Adjusted Cash Flow from Operations EBITDA and Free Cash Flows 60.5 68.2 72.3 55.2 56.2 $0.0 $25.0 $50.0 $75.0 FY '12 FY '13 FY '14 YTD '14 YTD '15 38.5 47.3 54.0 40.9 44.3 $- $10 $20 $30 $40 $50 $60 FY '12 FY '13 FY '14 YTD '14 YTD '15 Adjusted CFFO ($mm) FCF/shr $0.40 $0.64 $0.86 $0.66 $0.69 18.1 29.1 40.7 30.8 32.8 $- $7 $14 $21 $28 $35 $42 FY '12 FY '13 FY '14 YTD '14 YTD '15 Annual Adjusted Free Cash Flow & FCF/share
  • 22. 22  Adjusted diluted earnings per share were $0.09 vs. $0.06 in Q3 2014; adjustments include the reversal of more than $70 million of a valuation allowance against certain of ARC's deferred tax assets as a result of the company's sustained profitability over the past three years and forecasted continuing profitability  Adjusted cash flow from operations was $21.0 million, a 23% increase over Q3 2014  Gross profit was flat year-over-year, delivering a gross margin of 33.8%  Sales of $106.4 million were flat year-over-year  Adjusted EBITDA of $17.9 million fell 2% year-over-year Q3 2015 Performance Update Three Months Ended Nine Months Ended September 30, September 30, (All dollar amounts in millions, except EPS) 2015 2014 2015 2014 Net Sales $ 106.4 $ 106.8 $ 324.1 $ 316.2 Gross Margin 33.8% 33.9% 34.8% 34.6% Net income attributable to ARC $ 80.3 $ 3.7 $ 94.0 $ 9.6 Adjusted Net Income attributable to ARC $ 4.2 $ 2.9 $ 13.6 $ 9.2 Earnings per share - Diluted $ 1.69 $ 0.08 $ 1.98 $ 0.20 Adjusted earnings per share - Diluted $ 0.09 $ 0.06 $ 0.29 $ 0.20 Adjusted EBITDA $ 17.9 $ 18.3 $ 56.2 $ 55.2 Cash provided by operating activities $ 21.0 $ 15.3 $ 43.1 $ 37.0 Adjusted cash provided by operating activities $ 21.0 $ 17.0 $ 44.3 $ 40.9 Capital Expenditures $ 3.9 $ 3.4 $ 11.5 $ 10.0 Debt & Capital Leases (including current) $ 180.4 $ 205.6
  • 23. 23 2015 Annual Guidance Earnings Per Share: $0.33 - $0.36 Cash from Operations: $58mm - $61mm EBITDA: $70mm - $73mm 2014 Key Metrics (in millions unless noted) Revenue: $423.8 Gross Margin: 34.0% Adj. EPS: $0.25 Adj. EBITDA: $72.3 Adj. CF from Ops: $54.0 CapEx: $13.3 Shares O/S: 46,726,000 For further information, please contact David Stickney, ARC’s VP of Corporate Communications & IR at 925-949-5114