Good day and thank you for standing by. Welcome to the ARC Document Solutions Q1 2021 earnings report. At this time, all participants are in listen-only mode. After the speakers presentation, there will be a question-and-answer session. . Please be advised that Today's conference is being recorded. .

I would now like to hand the conference over to David Stickney, Vice President, Corp. Communications and Investor Relations. Sir, please go ahead. .

Thank you, Lee. And welcome everyone. On the call with me today are Suri Suriyakumar, our CEO; our Chief Operating Officer, Dilo Wijesuriya; and Jorge Avalos, our Chief Financial Officer..

Thank you, David. And welcome, everyone. It has been more than a year operating under the pandemic, but the business conditions have ebbed and flowed just as they have in any other year. After exceeding expectations in 2020, we knew we were headed for a rough start to 2021. And we communicated as much to you in our last earnings call.

All things considered, I am pleased that the company remained resilient and responsive in the face of the pandemic effects in January, as well as a week of terrible weather in February. Thankfully, March sales came back strongly and reestablished our momentum.

Absent the disruptions in January and February, we are confident that our sales and EBITDA would have been consistent with our fourth quarter performance. Sales in March reflected the pent-up demand from our existing customers, as well as from our aggressive marketing efforts throughout the quarter, as Dilo will outline later in the call.

Construction activity finally got off the ground and has been increasing ever since as indicated by forecasts and sales data from the AIA and building trade organizations. The push to get students back in school reinvigorated the education market, a new, but well established, customer base for ARC.

Retail opportunities are increasing with a steady reopening of the economy and scanning work is on the rise as businesses have recognized how vital it is for work from home or hybrid working arrangements to have 100% digital access to documents. .

Thank you, Suri. We weathered the strict shutdowns in the UK, Canada and several states, as well as the harsh weather conditions during the past quarter. We adjusted our operating conditions and focused on the immediate needs of our customers during this period. Throughout the quarter, we continued to strategize and execute on our marketing plan.

As customers work from home, we are connecting with them via our e-marketing programs and social media. Most customers are looking for new and improved ways to manage their print requirement. Technology-enabled print services are key and we continue to pay attention to what our customers need.

We were very happy to see the government's stimulus package for the education industry. Many of our educational customers are taking advantage of the funds to get their schools ready to reopen. Our ability to consult, design and print high quality graphics on short notice has enabled us to secure multiple graphic orders.

Our quest to diversify our customer verticals is continuing. It is clear that every customer vertical has a need for high quality printing, scanning of documents and management services. Our marketing campaigns are helping us to reach a wider audience and communicate our breadth of services. .

Thank you, Dilo. While our top line suffered from circumstances we couldn't control, our bottom line results remained strong throughout the quarter. Gross margins stayed above 30% as we leverage the efficiency of our cost structure.

Our EBITDA margin of 14.2%, a 130 basis point increase over the prior year reflects the strength and sustainability of our operations and profitability, even during the quarter when sales were low. Likewise, our earnings per share were in line with prior year's performance at $0.021.

And we have demonstrated over the past four quarters, ARC's ability to generate cash flow from operations remained very strong at more than $5 million for the quarter, a $2.5 million increase as compared to Q1 of 2020. Our cash balance remained at approximately $50 million, despite paying down our debt by $5 million in the quarter.

And our leverage ratio, net of cash, is below 1, an all time low despite a year of dealing with the pandemic. .

Thank you, Jorge. Operator, we are now available for our listeners' questions. .

Operator:.

Thank you, Lee. And thank you, everyone, for your attention this afternoon. We appreciate your continued interest in ARC Document Solutions and we look forward to talking with you next quarter. Take care. Have a good evening. Bye-bye. .

Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect..