AMERICAN REPROGRAPHICS (ARC) Announces Closing of New Asset Based Credit Facility

PRESS RELEASE FROM THE ISSUING COMPANY:

ARC Announces Closing of New Asset Based Credit Facility

WALNUT CREEK, CA -- (Marketwire) -- 01/30/12 --

ARC (NYSE: ARC), the nation's leading document solutions company for the architecture, engineering, and construction (AEC) industry, today announced that it has closed a new asset based senior secured credit facility with Wells Fargo Bank, National Association that was arranged by Wells Fargo Capital Finance, LLC. The committed size of the new facility is $50 million and includes a $10 million "accordion" provision that may be used to increase the borrowing capacity to $60 million. The initial term of the facility is four and a half years and has no financial covenants unless there is less than $10 million of excess availability. The new facility replaces ARC's existing and undrawn $50 million revolving credit line.

"We were very pleased to close this facility with Wells Fargo. I'm gratified that they share our confidence in the future of ARC and its strategy for moving forward," said K. "Suri" Suriyakumar, Chairman, President and CEO of ARC. "They have been big supporters over the past year as we have strengthened the capital structure of ARC and built a platform on which to grow."

The interest rate for the facility is set by an availability-based grid starting at LIBOR plus 175 basis points, 25 basis points lower than the Company's previous revolving credit facility.

"This is a great deal for ARC," said John E.D. Toth, ARC's CFO. "It provides us with a strong capital structure to execute the growth of our operations. The Wells Fargo team was very thoughtful in working with us to put together this facility. They appreciated our financial strength, our ability to continually generate positive cash flow regardless of the macro environment, and the unique aspects of our business model. They've been an outstanding partner in the past and have stepped up to the plate for us again. The new facility allows us greater flexibility and far fewer constraints should we choose to use it tactically or in pursuit of our overall corporate strategy."

About ARC (NYSE: ARC)

ARC (American Reprographics Company) is the nation's leading document solutions company providing business-to-business document management technology and services primarily to the architectural, engineering and construction, or 'AEC' industries. The Company also provides document management services to companies in non-AEC industries, such as technology, financial services, retail, entertainment, and food and hospitality.

ARC provides its services through its suite of technology products, a network of hundreds of service centers around the world, and on-site at more than 5,500 customer locations. The Company's service centers are digitally connected as a cohesive network, allowing the provision of services both locally and nationally to more than 120,000 active customers.

Contact:

David Stickney

ARC

Phone: 925-949-5114

Associated Builders and Contractors Chief Economist’s Outlook for 2012

In December, ABC’s Chief Economist released a PowerPoint presentation file that contains his “outlook” for 2012.

First, his bio…..

Anirban Basu Chief Economist Associated Builders and Contractors

Anirban Basu is Associated Builders and Contractors (ABC) chief economist. His primary responsibility is to provide ABC members with timely, comprehensive analyses on important trends in the U.S. commercial and industrial construction industry. He produces ABC’s Construction Backlog Indicator (CBI) which is based on a monthly survey of various ABC members and measures work to be performed by contractors to assess the health of the construction industry.

In addition, he produces the one-page, economic news report Construction Economic Update, with analysis of one or a combination of the following federal government economic indicators including construction spending, employment, producer price index and gross domestic product. Basu also writes a monthly article for Construction Executive magazine.

Basu is Chairman and CEO of Sage Policy Group, Inc., an economic and policy consulting firm in Baltimore, Maryland. He is one of the Mid-Atlantic region’s most recognizable economists, in part because of his consulting work on behalf of numerous clients, including prominent developers, bankers, brokerage houses, energy suppliers and law firms.

Basu has Bachelor of Science degree in foreign service from Georgetown University in Washington, D.C. He received a master of public policy degree from Harvard University’s John F. Kennedy School of Government in 1992, and a Master of Arts degree in mathematical economics from the University of Maryland in 1998. Additionally, Basu received a juris doctor degree from the University Of Maryland School Of Law in 2003, and is a member of the Maryland bar.

Second, Mr. Basu’s presentation contains a number of slides, among them, projections for construction industry activity.

One of those slides contains projections for 2.6% growth in “Non-Residential” Construction. (This particular slide’s source is the U.S. Census Bureau).

In 2012, growth is anticipated in these sectors: Power, Manufacturing, Healthcare, Commercial, Office, Lodging, Religious, Amusement and Recreation, Conservation and development, and Water Supply

In 2012, this sector, Sewage and waste disposal, is expected to be flat.

In 2012, these sectors are expected to decline: Education, Highway and street, Public safety and Transportation.

Here’s a link to the PowerPoint presentation file:

http://tinyurl.com/8yzo2ov

Do Cities and Counties in your state post plans and specs for construction project on their own, self-operated web-sites?

And, if they do, what information can you learn from what they post, and how can you benefit from knowing that information?

This morning, I visited the eBidBoard operated by the City of San Diego, CA.

I looked at a few of the projects posted on the City’s eBidBoard, just to see what type of information is provided, and to learn how one accesses plans and specs for the City’s construction projects.

Below, I’ve posted links to a couple of the projects currently up on the City’s eBidBoard. If you click on these links, you will see that the City provides:

a) a way to download plans and specs for its projects

b) a listing of companies who have registered for its projects; those who have registered typically include: general contractors, sub-contractors, material suppliers and planrooms

I could be wrong about this, but it does not appear that one can order “hard-copy” plans and specs through the City’s eBidBoard, and, if I’m right about that, that means that, when someone downloads the plan and spec files, one would then have to submit those files to a reprographer to produce “hard-copy” (unless, of course, the company downloading files has “in-house” printing equipment; some do.)

Therefore, why not do two things with the information provided about who’s registered for a project?

1) if you see a company who is not on your customer list, why not call them and ask them if they need “hard-copy” and offer to do that for them?

2) Put into your prospecting database the companies who appear on the list; they might not need “hard-copy” for the current project, but maybe in the future they will.

And, if you are a San Diego area Reprographer, why not try to convince the City to promote, on the City’s eBidBoard, your company as the one to go to when hard-copy prints are needed? Perhaps offer to pay the City a commission on the volume of printing you do for orders generated off the City’s eBidBoard. After all, cities and counties are strapped for cash.

Link to information re: Pump Station project

http://tinyurl.com/7k7ptlv

Link to information re: School Improvements project

http://tinyurl.com/89eza7a

Jacobs Engineering (NYSE: JEC) reports improved revenues

Below, is a note from Morningstar Research to investors about Jacobs Engineering, received in my e-mail in-box on January 28, 2012.

Jacobs Engineering JEC reported fiscal first-quarter results, with revenue increasing almost 12% from the same period last year and operating margins improving almost 100 basis points to 5.4%. This is the third quarter the company experienced top-line improvement, which we attribute primarily to a higher volume of technical services Jacobs provided to oil sands, petrochemical, and mining projects. We think the healthier activity level in these markets paints a positive picture for Jacobs, a company traditionally active in the oil and gas upstream production and downstream processing arena. Through the well-timed Aker acquisition, Jacobs also gained some momentum in the metals and mining field, which should attract additional growth opportunities. We think Jacobs is on the right track to deliver better performance in 2012 than 2011 despite some headwinds in the infrastructure and government support service markets. The company ended the quarter with almost $14.5 billion of backlog, as its higher services backlog offset the lower construction workload. We continue to believe that real revenue growth will not pick up steam until projects move from the feasibility study and planning phase to the construction phase, which we think will be a 2013-14 story. Compared with the service backlog, which typically carries a better near-term gross margin but generally a shorter duration, the construction management backlog represents Jacobs' potential in intermediate revenue growth for the next few years (although construction projects may have lower or more volatile margin profiles). In the next few quarters, we would look for Jacobs to move toward adding to its construction workload, which will be a stronger sign that the engineering and construction industry is finally in the recovery mode. In the meantime, the thawing of energy, petrochemical, and mining project pipelines should provide some much needed opportunities for most engineering and construction companies in our coverage universe in 2012.
 Min Tang-Varner, CFA

Reprographers, how much time and effort do you put into promoting and selling “scanning-only” services?

From a current “string” of comments in the IRgA Group on LinkedIn:

Two weeks ago, Mike Cully (of AIR Graphics) posted this comment…..

Kudos to the IRgA President Bob Roperti for his recent letter in the News Digest...

“Bob has eloquently sumed up exactly where our industry is today. Having had the good fortune to have breathed in the sweet smell of ammonia for over thirty years, it is now time for this generation of Reprographers to find our new direction and know that we will succeed.”

On January 26^th, Niro Perera (of ARC) posted this comment

“I would also add Document Digitization/archival solutions. Companies like Iron Mountain are dominating, but we have the technology and know how to convert paper documents to smart searchable digital content. Customizing solutions for medium to large sized customers can be lucrative.”

Our friend, Niro, is correct, companies in the Reprographics Industry do have the technology, knowledge and wherewithal (and have already made investments necessary) to offer scanning (archival) solutions.

Certainly, one “target group” for scanning-only services consists of the many government agencies, all around the country (and internationally as well, considering our overseas reprographer associates).

Some government agencies put out requests for bids and requests for proposals for scanning services, but, in order to enter those competitions, you have to know that those competitions exist! Before the advent of the Internet, government procurement departments used to go out and find vendors to complete for their procurements. But, after the Internet became widely used for procurements, government procurement departments (sadly) leave it up to vendors to “find” procurement opportunities. (I call that being lazy.) It takes a lot of time to research government procurement opportunities …. and you’re never going to find all of the ones that are opportunities for you, no matter how much time and effort you put into your research.

Take, for example, a scanning-only services RFP/Bid opportunity that happened around 2003 in one of my former company’s markets (Orlando, FL). Just last week, I found out about this particular RFP/Bid. I don’t recall that my former company submitted a proposal/bid for this opportunity. (Shame on us for not knowing about it!)

After you find an opportunity, if it is an “RFP’ opportunity, you’re going to have to describe your services and detail your work process, if you’re going to convince the government agency procurement department that your company “is the obvious choice”.

For educational purposes, I’ve stored in my Google Docs library a copy of a document that contains all of the documents associated with a “scanning-only” RFP procurement completed by Seminole County Government (Florida). This particular document includes the “award,” the RFP and the Proposal submitted by the winning vendor (including pricing.) Note the detailed write-up of the work to be done.

Link to document:

http://tinyurl.com/7vx348n

Develop your scanning-only target list! And, happy hunting!