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I always
encourage reprographers to read ARC’s financial-results-reports; they are
informative, and one can learn from that.
YOU are never too old to learn. [And
NONE of you are geniuses {with the exception of David Limbaugh)].
encourage reprographers to read ARC’s financial-results-reports; they are
informative, and one can learn from that.
YOU are never too old to learn. [And
NONE of you are geniuses {with the exception of David Limbaugh)].
ARC Document
Solutions (ARC) reported Q2 2013 financial results, after the market closed on
Tuesday, and you can access ARC’s 10-Q by visiting the investor section at
e-arc.com.
Solutions (ARC) reported Q2 2013 financial results, after the market closed on
Tuesday, and you can access ARC’s 10-Q by visiting the investor section at
e-arc.com.
I did not
listen in on the earnings call that ARC held late Tuesday afternoon, but, on
Wednesday morning, I did access, and read, the written transcript of the
earnings call, which can be found at seekingalpha.com. Listening to earnings calls (or reading the
transcripts of earnings calls, if you don’t have time to listen to the live
earnings calls), can also be quite informative.
listen in on the earnings call that ARC held late Tuesday afternoon, but, on
Wednesday morning, I did access, and read, the written transcript of the
earnings call, which can be found at seekingalpha.com. Listening to earnings calls (or reading the
transcripts of earnings calls, if you don’t have time to listen to the live
earnings calls), can also be quite informative.
Here’s my
very brief “takeaway” on ARC’s Q2 results:
very brief “takeaway” on ARC’s Q2 results:
Sales of
“services” in Q2 2013 were almost equal to sales of “services” in Q2 2012. However, within the numbers, ARC’s revenues
from “traditional reprographics” (and, revenues from “digital” services, since
those are generally tied to revenues from “traditional reprographics” services)
were down. But, on the other hand, ARC’s
revenues from its FM/MPS business segment were up.
“services” in Q2 2013 were almost equal to sales of “services” in Q2 2012. However, within the numbers, ARC’s revenues
from “traditional reprographics” (and, revenues from “digital” services, since
those are generally tied to revenues from “traditional reprographics” services)
were down. But, on the other hand, ARC’s
revenues from its FM/MPS business segment were up.
The A/E/C
industry has been healthier this year than last year; more projects to print
this year than last year; that good news probably offset somewhat by A/E/C
customers continuing to “print less” “per project.” Revenues from “traditional reprographics”
services were down, but revenues from “OnSite” services were up. As ARC continues to push FM/MPS services, it
could well be that some customers, whose revenues were formerly counted as
“traditional reprographics” revenues, were, at some point, “converted” to
FM/MPS customers.
industry has been healthier this year than last year; more projects to print
this year than last year; that good news probably offset somewhat by A/E/C
customers continuing to “print less” “per project.” Revenues from “traditional reprographics”
services were down, but revenues from “OnSite” services were up. As ARC continues to push FM/MPS services, it
could well be that some customers, whose revenues were formerly counted as
“traditional reprographics” revenues, were, at some point, “converted” to
FM/MPS customers.
ARC’s gross
margin expanded 220 basis points, Q2 2013 vs. Q2 2012; and, to me, that’s a
stunning achievement, especially since this margin expansion was not driven by
increased sales. As most reprographers
know, the incremental gross margin on incremental “traditional reprographics”
services revenues can be very, very high; my estimate of that incremental
margin is 50-85% (depends on prices charged), so, when a company’s gross margin
improves, and improves quite a bit, without
the benefit of increased traditional reprographics services revenues, that
means that the company has controlled (and cut) costs in a very meaningful
way. That’s what ARC said it was going
to do. And, it’s quite obvious that ARC
has done that.
margin expanded 220 basis points, Q2 2013 vs. Q2 2012; and, to me, that’s a
stunning achievement, especially since this margin expansion was not driven by
increased sales. As most reprographers
know, the incremental gross margin on incremental “traditional reprographics”
services revenues can be very, very high; my estimate of that incremental
margin is 50-85% (depends on prices charged), so, when a company’s gross margin
improves, and improves quite a bit, without
the benefit of increased traditional reprographics services revenues, that
means that the company has controlled (and cut) costs in a very meaningful
way. That’s what ARC said it was going
to do. And, it’s quite obvious that ARC
has done that.
The
reprographics industry is still in a recovery mode. Yet, ARC managed to post positive EBITDA,
EBIT and Net Income. Take a few minutes
to compare ARC’s EBITDA %age to Service Point Solutions’ EBITDA %age. Interesting comparison, for sure!
reprographics industry is still in a recovery mode. Yet, ARC managed to post positive EBITDA,
EBIT and Net Income. Take a few minutes
to compare ARC’s EBITDA %age to Service Point Solutions’ EBITDA %age. Interesting comparison, for sure!
.
Reprographics 101 