ARC Document Solutions, Inc.

Thank you for standing by. My name is John, and I'll be your conference operator for today. At this time, I would like to welcome everyone to the ArcDocument Solutions second quarter 2024 earnings report. All lights have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, followed by the number one on your telephone keypad. If you would like to withdraw a question, simply press star one again. Thank you. I would now like to turn the call over to David Stickney, Vice President, Investor Relations.

Please go ahead. Thank you, John, and welcome, everyone. On the call with me today are Suri Suryakumar, our CEO and Chairman, our President and Chief Operating Officer, Dilo Ujusuriya, and George Avalos, our Chief Financial Officer. Our second quarter results for 2024 were publicized earlier today in a press release. The press release and other company materials are available from our investor relations pages on ARC Document Solutions website at ir.e-arc.com. Please note that today's call will contain forward-looking statements and our only predictions based on information as of today, August 7, 2024, and actual results may differ materially as a result of risks and uncertainties that we highlight in our quarterly and annual SEC filings. Any non-GAAP measures discussed today are reconciled in our press release and in our Form 8K filing. Before reviewing our second quarter results, we should note that the company has disclosed its receipt of a non-binding proposal outlining a going private transaction at a purchase price of $3.25 per share in cash. The proposal was submitted by an acquisition group consisting of ARC's C-suite and a private investor. In response to the proposal, a special committee of our board of directors consisting entirely of independent disinterested directors was formed to review and evaluate the proposed transaction and continues to carefully consider it with the assistance of its independent independent financial and legal advisors. No assurances can be given regarding the terms and details of any transaction. that any proposal made by the acquisition group regarding a transaction will be accepted by the special committee, that definitive documentation relating to any such transaction will be executed, or that a transaction will be consummated in accordance with that documentation, if at all. For further information, we direct you to the 8 form 13 and a press release available on AHRQ's investor relations website at ir.e-arc.com. No additional information has been released, nor will be on this call. We will now continue with our customary remarks, and at this point, I'll turn the call over to our chairman and CEO, Suri Suryakumar. Suri?

Thank you, David, and good afternoon, everyone. Net sales continued to grow in the second quarter, as did our gross margin and adjusted earnings per share. The execution of our strategic objectives were once again responsible for our success, despite uncertain business conditions caused by the high interest rates and the weakness in commercial construction due to excess supply. Our strategic sales focus drove top-line growth. with digital color printing making an outsized contribution to our overall success despite the decrease in digital plan printing. Scanning and archiving continue to grow at a healthy pace as expected. On-site services sales fell slightly, but we continue to believe it'll provide a steady base of sales with upside potential in the future. While we saw an incremental uptick in equipment and supplies, we believe that buying habits have stabilized as customers have adjusted to a new high interest rate environment. With an increase in sales and our ability to leverage our workforce and our overhead cost, we exceeded our own expectations in gross margins, growing it by 30 basis points year over year. Throughout the past several quarters, we also made several investments in our sales force and in new marketing programs. While these quarterly SG&A costs were not inconsequential, putting new initiatives on trial to boost sales must be part of our growth efforts, and we were generally pleased with ourselves. Our performance in the first half of the year has been gratifying. and it is a testament to our strategic decisions and the company's execution. While we expect difficult market conditions to continue in the second half of the year, we remain focused on our long-term objectives. For more details about our activities in the second quarter, I'll now ask Dilo and George for their comments. Dilo? Thank you, Suri.