Investor Overview. Information is current to May 3, 2016 unless otherwise indicated

Transcription

1 Investor Overview Information is current to May 3, 2016 unless otherwise indicated

2 ARC Document Solutions assists design and construction professionals in the management and distribution of their information.

3 For more than 100 years, we used print as a medium... today we use the cloud and mobile devices. 3

4 We believe cloud and mobile technology will transform the way the construction industry distributes documents and information, dramatically increasing its speed and efficiency. Driven by our extensive industry knowledge and experience, more than 200 technology professionals at ARC s technology centers are developing solutions specifically to address the construction industry needs. ARC Document Solutions has invested over a $100 million in R&D over the past decade. 4

5 Our clients include tens of thousands of companies throughout the industry, including exclusive document management agreements with 22 of the Top 100 design, engineering and construction firms in the U.S. And thousands more 5

6 3 Key Areas of Document Management Project Documents involving architectural, engineering and design drawings and documents, largely involving plans and specifications. Office Documents related to business management and administration such as financial, contractual, compliance, marketing, HR, and other activities. Archived Documents related to all aspects of business, including project documents, specialized use documents, and office documents. 6

7 3 Solutions to Facilitate Communication Construction Document & Information Management CDIM Managed Print Services MPS Archive & Information Management AIM 7

8 CDIM Solutions Project Communication & Distribution Project Information Management Document Management & Reproduction Global Document Distribution SOFTWARE 3 COMPONENTS OF EACH SOLUTION PROFESSIONAL SERVICES Outsourced document management Hyperlinking services BIM services and support Integrations with third-party software Customized BI reports and analytics Migration of projects from third-party software Data segregation - Separate storage Custom branding Model creation for all or single trades MEP/FP Clash detection and collision reports and more HARDWARE SmartScreens Tablet Computers Plotters MFD s Scanners 3D Printers

9 MPS Solutions Managed Prints Services Print Management Print Cost Recovery Business Analytics Archive-As-You-Print Reporting Dashboards SOFTWARE 3 COMPONENTS OF EACH SOLUTION PROFESSIONAL SERVICES Customized rules implementation Customized software development Customized integrations with third-party software Customized dynamic BI reports and Analytics Software installation & support Fleet optimization IT support and printer and driver management and more HARDWARE SmartScreens Tablet Computers Plotters MFD s Scanners 3D Printers

10 AIM Solutions Archiving & Information Management Facilities Information Management Compliance Information Management Reporting Dashboards SOFTWARE 3 COMPONENTS OF EACH SOLUTION PROFESSIONAL SERVICES HARDWARE Analog-to-Digital Document Conversion Cloud-based Archive & Retrieval Archive Organization & Document Destruction Workflow Automation & Implementation Retention policy implementation Customized software development Customized integrations with third-party software Customized BI reports & analytics E-discovery & legal hold and more. SmartScreens Tablet Computers Plotters MFD s Scanners

11 ARC Document Solutions provides technology and services that eliminate paper and printing from document management delivers solutions that strip days and weeks from project schedules makes legacy documents searchable and instantly accessible reduces annual print costs per person from $250 up to $1,000 reduces all document-related costs by as much as 30% We save our largest customers millions of dollars per year. 11

12 Financial Discussion

13 CDIM MPS AIM ~50% of Net Revenue 2015 Sales of $221mm Annual YOY Growth of 1% 1Q16 YOY Sales Decrease of 2% Estimated gross margin: 37%-40% ~33% of Net Revenue 2015 Sales of $144mm Annual YOY Growth of 2% 1Q16 YOY Sales Decrease of 7% Estimated gross margin: 32%-35% Equipment & Supplies (defensive) ~12% of Net Revenue 2015 Sales of $50mm Annual YOY Decline of -3% 1Q16 YOY Sales Increase of 17% Estimated gross margin: 18%-21% ~4% of Net Revenue 2015 Sales of $13mm Annual YOY Growth of 22% 1Q16 YOY Sales Increase of 33% Estimated gross margin: 35%-38% 13

14 General Sales Composition of Solutions CDIM Traditional Repro (~50%) Color Imaging (~40%) Professional & Cloud Services (~10%) MPS Global Customers (~30%) Regional Customers (~10%) Local Customers (~60%) AIM Digitization Services (~95%) Professional & Cloud Services (~5%) 14

15 Revenue and Gross Margin Revenue generation from new services beginning to offset slowly declining business from traditional reprographics Roughly one-third of sales represent contractbased, recurring revenue from MPS Experiencing double-digit revenue growth and new market opportunities in AIM Gross Margins expand during periods when our mix is favorable, when we can leverage fixed costs and labor against revenue growth, and can benefit from targeted margin improvement exercises $400 $300 $200 $100 $0 36.0% 32.0% 28.0% Revenue ($mm) $406 $407 $424 $429 $104.3 $103.6 FY12 FY13 FY14 FY 15 1Q 15 1Q 16 Gross Margin 34.6% 34.0% 34.5% 33.0% 32.6% 30.4% 24.0% FY12 FY13 FY14 FY15 1Q15 1Q16

16 Notable Revenue Trends Primary Sales Offsets by Business Line (All figures in millions unless otherwise noted) Q '16 Annualized Traditional Repro YOY Sales Decreases $19.1 $10.2 $3.1 $4.1 $1.2 $5.0 New Services* YOY Sales Increases NA NA $0.8 $3.7 $1.0 $4.0 Traditional Repro % of Net Sales 30% 27% 25% 24% 24% New Services % of Net Sales NA 2.8% 2.8% 3.7% 4.2% CDIM Sales Trends Traditional Reprographics declining slowly with adoption of technology Color Imaging in demand in both construction and retail SKYSITE, BIM, Project Information Management, etc. gaining traction MPS Sales Trends Smaller account acquisitions in 2015 suppressed YOY growth rate $10mm account did not renew in Dec 2015 putting pressure on 2016 MPS Expect continued growth in local and regional accounts in 2016 AIM Sales Trends Double-digit quarterly growth trend over last four quarters New service prone to choppy growth due to startup nature Equipment & Supplies Sales Trends Subject to seasonal trends International sales (China) highly influential Defensive sales; non-strategic * Includes cloud-applications, BIM/FIM/PIM services, and AIM services 16

17 EBITDA and Free Cash Flows 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 $83mm in NOL's Adjusted Free Cash Flow * grew 15% year-over-year from $40.7mm in 2014 to $46.9mm in 2015 despite single-digit sales growth Adjusted EBITDA ($mm) Adjusted CFFO ($mm) Annual Adjusted Free Cash Flow & FCF/share $75.0 $50.0 $25.0 $ FY12 FY13 FY14 FY15 1Q15 1Q16 $60 $50 $40 $30 $20 $10 $ FY12 FY13 FY14 FY15 1Q15 1Q16 $50 $40 $30 $20 $10 $ FY12 FY13 FY14 FY15 1Q15 1Q16 FCF/shr $0.40 $0.63 $0.87 $0.99 * Adjusted Free Cash Flow calculated from Adjusted Cash Flow from Operations

18 Uses of Cash Delevering/Senior Debt Reduction (All figures in millions unless otherwise noted) Q '16 Total Debt $ Senior Debt $137.1 Senior Debt reduction of $58.9mm in nine quarters Stock Repurchase Program est. Feb ,000 shares repurchased in first quarter of 2016 at a purchase price of $2.7mm Plan authorizes the company to purchase up to $15 million of common stock through Dec. 31, 2017 The timing and amounts of any future purchases will be based on market conditions and other factors including price, regulatory requirements, and capital availability The company expects that the repurchase program will be funded by cash flows generated from its operations 18

19 Financial Highlights from 2015 & 1Q 2016 Twelve Months Ended Three Months Ended December 31, March 31, (All dollar amounts in millions, except EPS) Net Revenue $ $ $ $ Gross Margin 34.6 % 34.0 % 32.6 % 34.5 % Net income (loss) attributable to ARC $ 97 $ 7.3 $ 2.6 $ 4.4 Adjusted net income attributable to ARC $ 16.8 $ 11.8 $ 2.7 $ 3.2 Diluted earnings (loss) per share $ 2.04 $ 0.15 $ 0.05 $ 0.09 Adjusted diluted earnings per share $ 0.35 $ 0.25 $ 0.06 $ 0.07 Cash provided by operating activities $ 60.0 $ 50.0 $ 5.3 $ 5.3 Adjusted cash provided by operating activities $ 61.2 $ 54 $ 5.3 $ 6.4 Adjusted EBITDA $ 72.2 $ 72.3 $ 14.8 $ 16.8 Capital Expenditures $ (14.2 ) $ (13.3 ) $ 2.5 $ 3.5 Debt & Capital Leases (including current) $ 173 $ 204 $ 167 $

20 2015 Key Metrics (in millions unless noted) Revenue: $428.7 Gross Margin: 34.6% Adj. EPS: $0.35 Adj. EBITDA: $72.2 Adj. CF from Ops: $61.2 CapEx: $14.2 Shares O/S: 47,532, Annual Guidance Earnings Per Share: $ $0.35 Cash from Operations: $55mm - $60mm EBITDA: $66mm - $71mm For further information, please contact David Stickney, ARC s VP of Corporate Communications & IR at