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8-K - FORM 8-K - ARC DOCUMENT SOLUTIONS, INC. | c15581e8vk.htm |
EX-10.1 - EXHIBIT 10.1 - ARC DOCUMENT SOLUTIONS, INC. | c15581exv10w1.htm |
Exhibit 99.1
ARC PROVIDES INSIGHT INTO FIRST QUARTER RESULTS AND ANNOUNCES FURTHER CONSOLIDATION
| First quarter revenue indicates core business sales likely to remain flat for most of 2011 |
| Further consolidations planned to facilitate additional cost reductions |
| Corporate finance function to be consolidated into corporate headquarters |
| CFO Mather to retire; search begun for new CFO |
| Jorge Avalos, VP of Finance, appointed CAO |
WALNUT CREEK, CA, April 14, 2011 ARC (NYSE: ARC), the nations leading provider of reprographics
services and technology, today announced that March sales were consistent with sales in January and
February, indicating first quarter revenues to be in the range of $105 to $107 million. While the
quarterly sales figure was not unexpected, revenue from construction project printing in March was
lackluster. Given that March is typically an indicator of annual revenue from the non-residential
construction segment, management expects a difficult year for core business sales. As a result, ARC
announced that it is further restructuring its operations and management to reduce costs and
strengthen growing segments of its business.
Revenue for the quarter was in line with our projections, but sales from construction project
printing remain challenged, said K. Suri Suriyakumar, Chairman, President and CEO of ARC. On
the other hand we see exciting signs of growth in the Global Services and MPS segments of our
business, and many of these AEC customers are beginning to hire. Our increased market share should
drive our core business substantially as project work returns later in the year. With recent
improvements in unemployment and vacancy rates, I think it is clear that an upturn is on its way.
Management announced that, given current market conditions, the Company is reducing the number of
its branches in several local markets, while maintaining its extensive presence in major
metropolitan areas, a feature of the Company that has been critical to its success. At the same
time ARCs operational management is being restructured to address the decline in core business
sales and the growth in new segments such as Global Services, MPS, Color and Technology Services.
Company restructuring will continue throughout the second quarter, with anticipated annualized
savings of more than $14 million.
Among the most significant management changes planned for the year is the consolidation of the
corporate finance function into the Companys corporate headquarters in Walnut Creek, California.
Since its inception, ARCs operations and finance offices have been decentralized in keeping with
its historical management structure. The consolidation reflects the evolving centralization of ARC
management
and will foster a closer relationship between the finance and operations teams to address
continuing economic challenges and an ongoing industry technology transition.
Jorge Avalos, ARCs Vice President and Corporate Controller, will be relocating to the Walnut Creek
office and leading the consolidated financial accounting operations of the Company. Mr. Avalos has
also been appointed Chief Accounting Officer of the Company. Mr. Avalos joined the Company in 2006
taking on increasing levels of responsibility throughout his career at ARC. Prior to joining the
Company, Mr. Avalos was an assurance manager for PricewaterhouseCoopers, and the Corporate
Controller for Vendare Media (later merged with Epic Media Group), an online advertising network
and social media company.
Jonathan Mather, ARCs CFO, has chosen not to relocate to Northern California and will instead
retire from the Company to remain close to his family and community in the Los Angeles-area. Mr.
Mather will assist the finance team in relocating to Walnut Creek, and assist Mr. Suriyakumar in
the engagement of a new CFO.
When Jonathan joined us in 2006 after his tenure at NETGEAR, one of the stipulations of his
employment was that his offices would remain close to his home in Southern California. While
recognizing the necessity of the corporate office consolidation, he has chosen to remain in Los
Angeles and we respect his decision, said Mr. Suriyakumar. Jonathan has been the driving force
behind the success of the finance function here at ARC over the past four and a half years. We are
happy to have his good counsel and guidance throughout the transition, and we wish him well in his
future endeavors.
ARC management will maintain its traditional quiet period leading up to the formal announcement of
its first quarter results on May 3, 2011.
About ARC
ARC (American Reprographics Company) is the leading reprographics company in the United States
providing business-to-business document management technology and services to the architectural,
engineering and construction, or AEC industries. The Company also provides document management
services to companies in non-AEC industries, such as technology, financial services, retail,
entertainment, and food and hospitality. ARC provides its services through its suite of
reprographics technology products, a network of hundreds of reprographics service centers around
the world, and on-site at more than 5,500 customer locations. The Companys service centers are
digitally connected as a cohesive network, allowing the provision of services both locally and
nationally to more than 120,000 active customers.
Forward-Looking Statements
This press release contains forward-looking statements that are based on current opinions,
estimates and assumptions of management regarding future events and the future financial
performance of the Company. Words such as will, on its way, expect and similar expressions
identify forward-looking statements and all statements other than statements of historical fact,
including, but not limited to, any projections regarding earnings, revenues and financial
performance of the Company, could be deemed forward-looking statements. We caution you that such
statements are only predictions and are subject to certain risks and uncertainties that could cause
actual results to differ materially from those contained in the forward-looking statements. Factors
that could cause our actual results to differ materially from those set forth in the
forward-looking statements include, but are not limited to, the current economic recession and
downturn in the architectural, engineering and construction industries specifically, and the timing
and nature of any economic recovery; our ability to streamline operations and reduce and/or manage
costs; competition in our industry and innovation by our competitors; our failure to anticipate and
adapt to future changes in our industry; our failure to take advantage of market opportunities
and/or to complete acquisitions; our failure to manage acquisitions, including our inability to
integrate and merge the business operations of the acquired companies or failure to retain key
personnel and customers of acquired companies; our dependence on certain key vendors for equipment,
maintenance services and supplies; damage or disruption to our facilities, our technology centers,
our vendors or a majority of our customers; and our failure to continue to develop and introduce
new services successfully. The foregoing list of risks and uncertainties is illustrative but is by
no means exhaustive. For more information on factors that may affect our future performance, please
review our periodic filings with the U.S. Securities and Exchange Commission, and specifically the
risk factors set forth in our most recent reports on Form 10-K and Form 10-Q. The Company
undertakes no obligation to update or revise any forward-looking statements, whether as a result of
new information, future events, or otherwise, except as required by law.
Contacts:
David Stickney
|
Joseph Villalta | |
VP of Corporate Communications
|
The Ruth Group | |
Phone: 925-949-5100
|
Phone: 646-536-7003 | |
Email: davidstickney@e-arc.com
|
Email:jvillalta@theruthgroup.com |