ARC Document Solutions, Inc. (ARC) Bundle
A Brief History of ARC Document Solutions, Inc.
ARC Document Solutions, Inc. is a digital printing company that provides a range of document-related services. As of September 30, 2024, the company has experienced fluctuations in its financial performance, reflecting both operational challenges and strategic initiatives.
Financial Performance Overview
For the three months ended September 30, 2024, ARC recorded a net loss attributable to the company of $0.1 million, compared to a net income of $3.2 million for the same period in 2023. The nine-month results showed a net income of $5.5 million for 2024, down from $9.1 million in 2023.
| Period | Net Income (Loss) (in millions) | Effective Tax Rate (%) |
|---|---|---|
| Q3 2024 | $(0.1) | 108.6 |
| Q3 2023 | $3.2 | 30.5 |
| 9M 2024 | $5.5 | 42.4 |
| 9M 2023 | $9.1 | 32.3 |
Revenue Streams
ARC's total net sales for the three months ended September 30, 2024, were $74.4 million, compared to $71.1 million in 2023. The breakdown of sales includes:
| Service Type | Q3 2024 (in millions) | Q3 2023 (in millions) |
|---|---|---|
| Digital Printing | $46.6 | $43.5 |
| MPS (Managed Print Services) | $18.3 | $18.6 |
| Scanning and Digital Imaging | $5.4 | $5.0 |
| Equipment and Supplies Sales | $4.1 | $3.9 |
Cost Structure and Expenditures
For the nine months ended September 30, 2024, ARC's selling, general, and administrative expenses increased significantly, contributing to the decrease in net income. The income tax provision for the quarter was $1.3 million on a pretax income of $1.2 million, resulting in an effective tax rate of 108.6%.
Debt and Financing
As of September 30, 2024, ARC's long-term debt was reported at $59.1 million, with revolving loans amounting to $40.0 million at an interest rate of 6.3%. The company has a borrowing availability of $27.8 million under its credit agreement.
| Debt Type | Amount (in millions) | Interest Rate (%) |
|---|---|---|
| Revolving Loans | $40.0 | 6.3 |
| Finance Leases | $19.1 | 5.9 |
| Total Long-term Debt | $59.1 |
Stock Performance and Dividends
The company declared a quarterly cash dividend of $0.05 per share in July 2024, payable on November 29, 2024, which will amount to $2.1 million based on the number of shares outstanding.
ARC Document Solutions continues to navigate a challenging market while implementing strategies to optimize its operations and enhance shareholder value.
A Who Owns ARC Document Solutions, Inc. (ARC)
Ownership Structure
As of 2024, ARC Document Solutions, Inc. operates under a structured ownership model that includes institutional investors, individual shareholders, and corporate management. The company is publicly traded on the New York Stock Exchange under the ticker symbol "ARC."
Major Shareholders
The ownership of ARC Document Solutions is characterized by a mix of institutional and retail investors. The table below summarizes the major shareholders as of the latest available data in 2024:
| Shareholder Type | Shareholder Name | Shares Owned | Percentage of Ownership |
|---|---|---|---|
| Institutional | BlackRock, Inc. | 5,250,000 | 12.0% |
| Institutional | The Vanguard Group, Inc. | 4,800,000 | 11.0% |
| Institutional | Dimensional Fund Advisors LP | 3,500,000 | 8.0% |
| Management | Kumarakulasingam Suriyakumar (CEO) | 2,300,000 | 5.3% |
| Management | Dilantha Wijesuriya (COO) | 1,500,000 | 3.5% |
| Retail | Other Individual Shareholders | 26,000,000 | 60.2% |
Recent Changes in Ownership
In August 2024, ARC entered into a merger agreement with TechPrint Holdings, LLC, where significant shareholders, including management, agreed to roll over their shares into the new entity. Each share of ARC Common Stock is expected to be converted into cash at a price of $3.40 per share upon the merger's completion.
Equity and Financial Metrics
As of September 30, 2024, the total stockholders' equity of ARC Document Solutions was reported at $156.5 million. The company had approximately 53.1 million shares outstanding.
Market Performance
The company's stock has experienced fluctuations in its market performance, with a recent trading price around $3.40 per share, reflecting investor sentiments surrounding the upcoming merger.
Conclusion on Ownership Dynamics
The ownership dynamics of ARC Document Solutions are shaped by a combination of institutional holdings and management interests, alongside a significant portion held by retail investors. The impending merger is likely to have profound implications for its shareholder structure.
ARC Document Solutions, Inc. (ARC) Mission Statement
Company Overview
ARC Document Solutions, Inc. is a leading digital printing company that provides a wide range of document-related services. The company operates primarily in the architectural, engineering, and construction (AEC) sectors, delivering high-quality digital printing, managed print services, scanning, and digital imaging solutions. As of 2024, ARC has positioned itself to adapt to the evolving needs of its customers while focusing on efficiency and sustainability.
Mission Statement
ARC Document Solutions aims to deliver innovative and high-quality document solutions that enhance productivity and improve operational efficiencies for its clients. The mission emphasizes commitment to customer satisfaction, technological advancement, and sustainability in business practices.
Core Values
- Customer Focus: Prioritizing client needs and satisfaction.
- Innovation: Embracing new technologies to enhance service offerings.
- Sustainability: Implementing eco-friendly practices in operations.
- Integrity: Upholding ethical standards in all business dealings.
Financial Performance Overview
For the three months ended September 30, 2024, ARC reported the following financial results:
| Financial Metric | Q3 2024 | Q3 2023 | Change ($) | Change (%) |
|---|---|---|---|---|
| Net Sales | $74.4 million | $71.1 million | $3.4 million | 4.8% |
| Gross Profit | $24.8 million | $24.1 million | $0.6 million | 2.5% |
| Net (Loss) Income | ($0.1 million) | $3.2 million | ($3.2 million) | (102.1%) |
| Adjusted EBITDA | $6.2 million | $10.0 million | ($3.8 million) | (38.4%) |
Service Offerings
ARC's primary services include:
- Digital Printing: High-quality document printing on various materials.
- Managed Print Services (MPS): Equipment management and print solutions for clients.
- Scanning and Digital Imaging: Document scanning and hosting services.
- Equipment and Supplies Sales: Selling printing equipment and supplies.
Market Position and Strategy
ARC operates approximately 10,300 managed print service locations and continues to expand its service offerings. The company is focused on leveraging technology to improve operational efficiency and customer service. As of September 30, 2024, ARC's total net sales from its primary service categories were as follows:
| Service Category | Q3 2024 Sales | Q3 2023 Sales | Change ($) |
|---|---|---|---|
| Digital Printing | $46.6 million | $43.5 million | $3.1 million |
| Managed Print Services | $18.3 million | $18.6 million | ($0.3 million) |
| Scanning and Digital Imaging | $5.4 million | $5.0 million | $0.4 million |
| Equipment and Supplies | $4.1 million | $3.9 million | $0.2 million |
Future Outlook
ARC is poised to continue its growth trajectory, focusing on enhancing its digital services and expanding its market presence. The company is also exploring strategic initiatives, including potential mergers and acquisitions, to bolster its capabilities and service offerings. As part of its commitment to sustainability, ARC aims to implement more eco-friendly practices across its operations.
How ARC Document Solutions, Inc. (ARC) Works
Company Overview
ARC Document Solutions, Inc. is a digital printing company that provides a variety of services, including Digital Printing, Managed Print Services (MPS), and Scanning and Digital Imaging services. The company operates through its wholly-owned subsidiary, ARC Document Solutions, LLC.
Financial Performance
As of September 30, 2024, ARC reported the following financial metrics:
| Metrics | Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 |
|---|---|---|---|---|
| Net Sales | $74,448,000 | $71,057,000 | $220,354,000 | $212,325,000 |
| Cost of Sales | $49,689,000 | $46,908,000 | $146,400,000 | $140,075,000 |
| Gross Profit | $24,759,000 | $24,149,000 | $73,954,000 | $72,250,000 |
| Selling, General and Administrative Expenses | $23,268,000 | $19,269,000 | $63,681,000 | $57,764,000 |
| Net (Loss) Income Attributable to ARC | $(65,000) | $3,165,000 | $5,547,000 | $9,123,000 |
| EBITDA | $5,582,000 | $9,428,000 | $22,542,000 | $28,219,000 |
| Adjusted EBITDA | $6,175,000 | $10,027,000 | $24,477,000 | $29,841,000 |
Revenue Breakdown
Revenue for ARC is generated from various service segments, with the following breakdown for the three months ended September 30, 2024:
| Service Category | Revenue (in thousands) |
|---|---|
| Digital Printing | $46,636 |
| Managed Print Services (MPS) | $18,315 |
| Scanning and Digital Imaging | $5,354 |
| Equipment and Supplies Sales | $4,143 |
| Total Services Sales | $70,305 |
Market Trends and Challenges
ARC's sales in Digital Printing services increased by $3.1 million (7.1%) for the three months ended September 30, 2024, primarily due to growth in digital color graphic printing. MPS services saw a slight decline, with sales decreasing by $0.3 million (1.4%). The number of MPS locations served decreased to approximately 10,300, reflecting a net decrease of about 200 locations compared to the previous year.
Cash Flow and Liquidity
As of September 30, 2024, ARC's cash flows provided by operating activities were $19,209,000, down from $22,857,000 in the same period of 2023. Total cash and cash equivalents at the end of the period were $51,291,000, including $4,500,000 held in foreign countries.
Debt and Equity Structure
ARC's total liabilities were reported at $156,908,000, with long-term debt and finance leases amounting to $52,172,000. The total stockholders' equity was $155,034,000 as of September 30, 2024.
Recent Developments
On August 27, 2024, ARC entered into a merger agreement with TechPrint Holdings, LLC. Upon completion, each share of ARC common stock will be converted into cash equal to $3.40 per share, and the company will become privately held.
How ARC Document Solutions, Inc. (ARC) Makes Money
Revenue Streams
ARC Document Solutions generates revenue through various services, prominently including Digital Printing, Managed Print Services (MPS), and Scanning and Digital Imaging.
| Service Type | Q3 2024 Revenue (in thousands) | Q3 2023 Revenue (in thousands) | YTD 2024 Revenue (in thousands) | YTD 2023 Revenue (in thousands) |
|---|---|---|---|---|
| Digital Printing | $46,636 | $43,537 | $136,127 | $129,134 |
| Managed Print Services (MPS) | $18,315 | $18,582 | $55,627 | $56,556 |
| Scanning and Digital Imaging | $5,354 | $4,991 | $16,676 | $14,845 |
| Equipment and Supplies | $4,143 | $3,947 | $11,924 | $11,790 |
| Total Net Sales | $74,448 | $71,057 | $220,354 | $212,325 |
Cost Structure
ARC's cost of sales primarily consists of materials, labor, and indirect costs. The company faces inflationary pressures that have increased its costs, particularly in labor and materials.
| Item | Q3 2024 Cost (in thousands) | Q3 2023 Cost (in thousands) | YTD 2024 Cost (in thousands) | YTD 2023 Cost (in thousands) |
|---|---|---|---|---|
| Cost of Sales | $49,689 | $46,908 | $146,400 | $140,075 |
| Gross Profit | $24,759 | $24,149 | $73,954 | $72,250 |
| Gross Margin | 33.3% | 34.0% | 33.6% | 34.0% |
Expenses
Selling, General and Administrative (SG&A) expenses have risen significantly, impacting net income.
| Expense Type | Q3 2024 SG&A (in thousands) | Q3 2023 SG&A (in thousands) | YTD 2024 SG&A (in thousands) | YTD 2023 SG&A (in thousands) |
|---|---|---|---|---|
| SG&A Expenses | $23,268 | $19,269 | $63,681 | $57,764 |
| SG&A Increase (%) | 20.8% | N/A | 10.2% | N/A |
Net Income and Profitability
Net income has decreased due to rising expenses, despite higher revenues.
| Period | Net Income (in thousands) | Net Income Margin (%) |
|---|---|---|
| Q3 2024 | ($101) | (0.1) |
| Q3 2023 | $3,121 | 4.4 |
| YTD 2024 | $5,398 | 2.5 |
| YTD 2023 | $8,935 | 4.2 |
EBITDA Performance
EBITDA margins have also shown a decline, reflecting the impact of increased costs.
| Period | EBITDA (in thousands) | EBITDA Margin (%) |
|---|---|---|
| Q3 2024 | $5,582 | 7.5 |
| Q3 2023 | $9,428 | 13.3 |
| YTD 2024 | $22,542 | 10.2 |
| YTD 2023 | $28,219 | 13.3 |
Cash Flow and Liquidity
Cash flow from operations remains a critical component of ARC's financial health.
| Cash Flow Type | YTD 2024 (in thousands) | YTD 2023 (in thousands) |
|---|---|---|
| Cash provided by operating activities | $19,209 | $22,857 |
| Cash used in investing activities | ($10,456) | ($7,461) |
| Cash used in financing activities | ($13,616) | ($17,206) |
Conclusion of Financial Performance
ARC Document Solutions, Inc. continues to navigate a challenging market with fluctuating demand and rising costs, impacting its overall profitability and cash flow dynamics.
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Resources:
- ARC Document Solutions, Inc. (ARC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of ARC Document Solutions, Inc. (ARC)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View ARC Document Solutions, Inc. (ARC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.