ARC (NYSE: ARP) Q3 2010 Results

(This post was originally written the day ARC announced its Q2 2010 results, but I forgot to activate the post.)

After the market closed today, ARC reported its Q3 2010 results

Considering the fact that ARC released the bad news (the downward EPS and cash-flow revisions ARC previously announced) on October 11th, there were no surprises, whatsoever, in today’s Q3 2010 results press release.

Sales for Q3 2010 - $109.4 million
Sales for Q3 2009 - $119.4 million

Earnings for Q3 2010 - $300,000 (prox) (excluding the Goodwill impairment charge)
Earnings for Q3 2009 - $2.9 million (excluding Goodwill and intangible asset impairment charges and excluding a charges related to ARC’s credit agreements)

EPS for Q3 2010 - $.01 per share (excluding the Goodwill impairment charge)
EPS for Q3 2009 - $.06 per share (excluding Goodwill and intangible asset impairment charges and excluding a charges related to ARC’s credit agreements)

ARC’s Sales, for the first 9 months of 2010, came in at $336.7 million
ARC’s Sales, for the first 9 months of 2009, came in at $389.9 million

ARC’s Sales, for Q4 2009, came in at $111.7 million
ARC’s Sales for the full year 2009, came in at $501.6 million

In a post I did on this blog on August 4th, 2010, I “guessed” that ARC’s full-year 2010 Sales would come in between $447.0 - $452.0 million.

Based on ARC’s Q3 2010 results, I’m now revising that guess to somewhere between $441.0 and $446.0 million.

Earlier this year, AEC industry analysts – and some financial analysts – were projecting that the construction industry would be off another 10% in 2010 vs. 2009. ARC’s 2010 Sales results appear to be tracking that decline pretty closely.

ARC’s Q3 2010 press release said this, “Management noted that the Company acquired six new Global Services accounts since June, which are projected to generate more than $9 million in sales for 2011. The accounts were won primarily on the strength of ARC's managed print services offering.”

Questions about the above statement:

a) Regarding the six “new” Global Services Accounts, were these accounts completely “new” to ARC? Or, were one or more of these accounts formerly “regular” (non-Global-Serivces) accounts at ARC? In other words, is the $9 million “all new” business to ARC?

b) who are these six new “Global services” accounts? And, which reprographers lost these accounts?

Despite the very deep recession the AEC industry experienced (and, for the most part, continues to experience), ARC continues to impress with positive earnings from operations.