ARC Document Solutions, Inc. (ARC) has reported a 30.69 percent plunge in profit for the quarter ended Mar. 31, 2017. The company has earned $1.78 million, or $0.04 a share in the quarter, compared with $2.57 million, or $0.05 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $1.85 million, or $0.04 a share compared with $2.71 million or $0.06 a share, a year ago. Revenue during the quarter dropped 4.65 percent to $98.73 million from $103.55 million in the previous year period. Gross margin for the quarter contracted 135 basis points over the previous year period to 31.23 percent. Total expenses were 95.37 percent of quarterly revenues, up from 94.14 percent for the same period last year. That has resulted in a contraction of 122 basis points in operating margin to 4.63 percent.
Operating income for the quarter was $4.58 million, compared with $6.07 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $13.62 million compared with $14.80 million in the prior year period. At the same time, adjusted EBITDA margin contracted 49 basis points in the quarter to 13.80 percent from 14.29 percent in the last year period.
"As we stated earlier in the year, our transformation effort is progressing," said K. "Suri” Suriyakumar, chairman, chief executive officer and President of ARC Document Solutions. “We continue to protect our print revenues while working to accelerate our sales in technology services. We expect these efforts will continue throughout the year. Despite the disruptions caused by our sales team reconfiguration that started in the second half of last year, and shrinking print volumes, we generated strong cash flows and accelerated the reduction of our senior debt.”
For financial year 2017, ARC Document Solutions, Inc. projects diluted earnings per share to be in the range of $0.24 to $0.29 on adjusted basis.
Operating cash flow improves significantly
ARC Document Solutions, Inc. has generated cash of $6.94 million from operating activities during the quarter, up 30.91 percent or $1.64 million, when compared with the last year period. The company has spent $1.88 million cash to meet investing activities during the quarter as against cash outgo of $2.28 million in the last year period.
The company has spent $10.90 million cash to carry out financing activities during the quarter as against cash outgo of $10.30 million in the last year period.
Cash and cash equivalents stood at $19.67 million as on Mar. 31, 2017, up 17.13 percent or $2.88 million from $16.79 million on Mar. 31, 2016.
Working capital increases
ARC Document Solutions, Inc. has recorded an increase in the working capital over the last year. It stood at $44.67 million as at Mar. 31, 2017, up 10.31 percent or $4.17 million from $40.49 million on Mar. 31, 2016. Current ratio was at 1.71 as on Mar. 31, 2017, up from 1.63 on Mar. 31, 2016.
Cash conversion cycle (CCC) has decreased to 36 days for the quarter from 47 days for the last year period. Days sales outstanding went up to 55 days for the quarter compared with 53 days for the same period last year.
Days inventory outstanding has decreased to 13 days for the quarter compared with 23 days for the previous year period. At the same time, days payable outstanding went up to 31 days for the quarter from 30 for the same period last year.
Debt comes down
ARC Document Solutions, Inc. has recorded a decline in total debt over the last one year. It stood at $154.34 million as on Mar. 31, 2017, down 7.58 percent or $12.66 million from $167 million on Mar. 31, 2016. Total debt was 42.25 percent of total assets as on Mar. 31, 2017, compared with 35.84 percent on Mar. 31, 2016. Debt to equity ratio was at 0.96 as on Mar. 31, 2017, up from 0.80 as on Mar. 31, 2016. Interest coverage ratio deteriorated to 2.94 for the quarter from 4.20 for the same period last year. Disclaimer: Please note that this is an auto-generated article. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website. For queries contact: [email protected]
