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SAN RAMON, CA / ACCESSWIRE / December 19, 2019 / ARC Document Solutions, Inc. (NYSE:ARC) announced today that it is launching a cash dividend program. The program will operate independently of ARC's current share repurchases in the open market and reaffirms the Company's commitment to returning shareholder value as discussed on ARC's third quarter conference call on November 6, 2019.
At its most recent meeting, the Company's Board of Directors authorized an initial annual cash dividend of four cents per share, payable quarterly. The first quarterly dividend of one cent is payable February 28, 2020 to the Company's shareholders of record on January 31, 2020.
"Using ARC's strong cash flows to aggressively pay down our bank debt has provided the company with outstanding flexibility during this time of transition," said Suri Suriyakumar, CEO of ARC. "Given that our debt ratios are healthy we think it is time for us to embark on a dividend program that will directly benefit our shareholders, especially considering the current market conditions in our industry and our recent stock performance. We are happy to shift our capital allocation strategy to a return of shareholder value via a dividend program and expectations for continued purchases of our own stock in the open market given the current strength of cash flows in the business."
Concurrent with this announcement, ARC also disclosed that it entered into an amendment to its credit facility. In connection with the amendment, the term loan portion of ARC's credit facility was prepaid in full using additional borrowings under the revolving loan portion of its credit facility, which was increased to $80 million. The revolving loan has no regularly scheduled required principal payments. Subject to compliance with its financial covenants and a minimum liquidity test, the amendment also permits ARC to utilize up to $10 million in any twelve-month period to pay dividends or make share repurchases without having to include such amounts in the calculation of one of its financial covenants.
The details of ARC's amendment to the credit facility are included in today's 8-K filing.