ARC Document Solutions, Inc. (NYSE:ARC) Q3 2018 Earnings Conference Call - Final Transcript

Nov 07, 2018 • 05:00 pm ET


ARC Document Solutions, Inc. (NYSE:ARC) Q3 2018 Earnings Conference Call - Final Transcript


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Jorge Avalos

downward trend to continue into the fourth quarter. Of course, all of this translates into year-over-year adjusted EBITDA growth of more than $2 million or nearly 19%. Higher sales, margins and gross profit with the stabilization of SG&A are driving our improvement in EBITDA.

From a cash flow perspective, the year-to-date results have lagged behind prior year results due to the timing of accounts receivable collection and the $3.6 million year-to-date increase in medical expenses. A large portion of our sales from the third quarter will not be collected until the fourth quarter. Therefore, we expect an acceleration of cash flows in the fourth quarter, which gives us confidence that we will meet our annual cash flow guidance.

We continue to improve our capital structure by reducing our senior debt by $5 million during the quarter, making our overall reduction $15 million for the year. The result of our debt reduction has been an improvement in our leverage ratio to 2.4x and interest cost staying flat in spite of rising interest rates.

A persistent and steady effort rarely makes for an exciting story, but it always -- but it almost always creates a satisfying ending. While we've got one quarter to go before we wrap up 2018, our management team is completely focused on meeting the goals we set for ourselves and perhaps even exceeding those objectives in a few areas. The results of the past two quarters have begun to show what is possible with a constant effort, a good strategy, a little bit of momentum, and so we look forward to sharing more steady progress with you at the end of 2018 and into 2019. Suri?

Suri Suriyakumar

Thank you, Jorge. Operator, we are now ready for the questions.