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Share Name | Share Symbol | Market | Type |
---|---|---|---|
ARC Document Solutions Inc | NYSE:ARC | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.02 | 0.73% | 2.76 | 2.775 | 2.74 | 2.74 | 124,934 | 01:00:00 |
ý
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
20-1700361
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
Large accelerated filer
|
¨
|
Accelerated filer
|
ý
|
|
|
|
|
Non-accelerated filer
|
¨
(Do not check if a smaller reporting company)
|
Smaller reporting company
|
¨
|
PART I—FINANCIAL INFORMATION
|
|
Item 1. Condensed Consolidated Financial Statements
|
|
Condensed Consolidated Balance Sheets as of September 30, 2016 and December 31, 2015 (Unaudited)
|
|
Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2016 and 2015 (Unaudited)
|
|
Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2016 and 2015 (Unaudited)
|
|
Condensed Consolidated Statements of Equity for the nine months ended September 30, 2016 and 2015 (Unaudited)
|
|
Condensed Consolidated Statements of Cash Flows for the three and nine months ended September 30, 2016 and 2015 (Unaudited)
|
|
Notes to Condensed Consolidated Financial Statements (Unaudited)
|
|
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
Item 3. Quantitative and Qualitative Disclosures About Market Risk
|
|
Item 4. Controls and Procedures
|
|
PART II—OTHER INFORMATION
|
|
Item 1. Legal Proceedings
|
|
Item 1A. Risk Factors
|
|
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
|
|
Item 6. Exhibits
|
|
Signatures
|
|
Exhibit Index
|
|
Exhibit 31.1
|
|
Exhibit 31.2
|
|
Exhibit 32.1
|
|
Exhibit 32.2
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
December 31,
|
||||
(In thousands, except per share data)
|
2016
|
|
2015
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
19,640
|
|
|
$
|
23,963
|
|
Accounts receivable, net of allowances for accounts receivable of
$2,007
and $2,094
|
61,373
|
|
|
60,085
|
|
||
Inventories, net
|
19,981
|
|
|
16,972
|
|
||
Prepaid expenses
|
4,689
|
|
|
4,555
|
|
||
Other current assets
|
3,485
|
|
|
4,131
|
|
||
Total current assets
|
109,168
|
|
|
109,706
|
|
||
Property and equipment, net of accumulated depreciation of
$208,749
and $202,457
|
56,923
|
|
|
57,590
|
|
||
Goodwill
|
138,688
|
|
|
212,608
|
|
||
Other intangible assets, net
|
14,393
|
|
|
17,946
|
|
||
Deferred income taxes
|
74,138
|
|
|
74,196
|
|
||
Other assets
|
2,255
|
|
|
2,492
|
|
||
Total assets
|
$
|
395,565
|
|
|
$
|
474,538
|
|
Liabilities and Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
22,534
|
|
|
$
|
23,989
|
|
Accrued payroll and payroll-related expenses
|
10,196
|
|
|
12,118
|
|
||
Accrued expenses
|
16,793
|
|
|
19,194
|
|
||
Current portion of long-term debt and capital leases
|
12,926
|
|
|
14,374
|
|
||
Total current liabilities
|
62,449
|
|
|
69,675
|
|
||
Long-term debt and capital leases
|
145,978
|
|
|
157,018
|
|
||
Deferred income taxes
|
29,845
|
|
|
35,933
|
|
||
Other long-term liabilities
|
2,482
|
|
|
2,778
|
|
||
Total liabilities
|
240,754
|
|
|
265,404
|
|
||
Commitments and contingencies (Note 6)
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
ARC Document Solutions, Inc. stockholders’ equity:
|
|
|
|
||||
Preferred stock, $0.001 par value, 25,000 shares authorized;
0
shares issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock, $0.001 par value, 150,000 shares authorized;
47,415
and 47,130 shares issued and
45,975
and 47,029 shares outstanding
|
47
|
|
|
47
|
|
||
Additional paid-in capital
|
117,264
|
|
|
115,089
|
|
||
Retained earnings
|
39,198
|
|
|
89,687
|
|
||
Accumulated other comprehensive loss
|
(2,831
|
)
|
|
(2,097
|
)
|
||
|
153,678
|
|
|
202,726
|
|
||
Less cost of common stock in treasury,
1,440
and 101 shares
|
5,909
|
|
|
612
|
|
||
Total ARC Document Solutions, Inc. stockholders’ equity
|
147,769
|
|
|
202,114
|
|
||
Noncontrolling interest
|
7,042
|
|
|
7,020
|
|
||
Total equity
|
154,811
|
|
|
209,134
|
|
||
Total liabilities and equity
|
$
|
395,565
|
|
|
$
|
474,538
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
(In thousands, except per share data)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Service sales
|
$
|
89,178
|
|
|
$
|
94,384
|
|
|
$
|
272,394
|
|
|
$
|
287,045
|
|
Equipment and supplies sales
|
11,265
|
|
|
12,034
|
|
|
35,369
|
|
|
37,081
|
|
||||
Total net sales
|
100,443
|
|
|
106,418
|
|
|
307,763
|
|
|
324,126
|
|
||||
Cost of sales
|
67,713
|
|
|
70,475
|
|
|
204,904
|
|
|
211,303
|
|
||||
Gross profit
|
32,730
|
|
|
35,943
|
|
|
102,859
|
|
|
112,823
|
|
||||
Selling, general and administrative expenses
|
24,893
|
|
|
25,816
|
|
|
76,752
|
|
|
80,403
|
|
||||
Amortization of intangible assets
|
1,160
|
|
|
1,375
|
|
|
3,705
|
|
|
4,306
|
|
||||
Goodwill impairment
|
—
|
|
|
—
|
|
|
73,920
|
|
|
—
|
|
||||
Restructuring expense
|
—
|
|
|
4
|
|
|
7
|
|
|
89
|
|
||||
Income (loss) from operations
|
6,677
|
|
|
8,748
|
|
|
(51,525
|
)
|
|
28,025
|
|
||||
Other income, net
|
(16
|
)
|
|
(25
|
)
|
|
(54
|
)
|
|
(81
|
)
|
||||
Loss on extinguishment of debt
|
66
|
|
|
96
|
|
|
156
|
|
|
193
|
|
||||
Interest expense, net
|
1,563
|
|
|
1,679
|
|
|
4,535
|
|
|
5,475
|
|
||||
Income (loss) before income tax provision (benefit)
|
5,064
|
|
|
6,998
|
|
|
(56,162
|
)
|
|
22,438
|
|
||||
Income tax provision (benefit)
|
2,162
|
|
|
(73,338
|
)
|
|
(5,884
|
)
|
|
(71,766
|
)
|
||||
Net income (loss)
|
2,902
|
|
|
80,336
|
|
|
(50,278
|
)
|
|
94,204
|
|
||||
Income attributable to the noncontrolling interest
|
(61
|
)
|
|
(50
|
)
|
|
(211
|
)
|
|
(225
|
)
|
||||
Net income (loss) attributable to ARC Document Solutions, Inc. shareholders
|
$
|
2,841
|
|
|
$
|
80,286
|
|
|
$
|
(50,489
|
)
|
|
$
|
93,979
|
|
Earnings (loss) per share attributable to ARC Document Solutions, Inc. shareholders:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.06
|
|
|
$
|
1.72
|
|
|
$
|
(1.10
|
)
|
|
$
|
2.02
|
|
Diluted
|
$
|
0.06
|
|
|
$
|
1.69
|
|
|
$
|
(1.10
|
)
|
|
$
|
1.98
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
45,599
|
|
|
46,698
|
|
|
46,055
|
|
|
46,601
|
|
||||
Diluted
|
46,189
|
|
|
47,557
|
|
|
46,055
|
|
|
47,541
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
(In thousands)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net income (loss)
|
$
|
2,902
|
|
|
$
|
80,336
|
|
|
$
|
(50,278
|
)
|
|
$
|
94,204
|
|
Other comprehensive loss, net of tax
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments, net of tax
|
(250
|
)
|
|
(1,434
|
)
|
|
(873
|
)
|
|
(1,524
|
)
|
||||
Fair value adjustment of derivatives, net of tax
|
47
|
|
|
(69
|
)
|
|
(50
|
)
|
|
(263
|
)
|
||||
Other comprehensive loss, net of tax
|
(203
|
)
|
|
(1,503
|
)
|
|
(923
|
)
|
|
(1,787
|
)
|
||||
Comprehensive income (loss)
|
2,699
|
|
|
78,833
|
|
|
(51,201
|
)
|
|
92,417
|
|
||||
Comprehensive income (loss) attributable to noncontrolling interest
|
36
|
|
|
(237
|
)
|
|
22
|
|
|
(30
|
)
|
||||
Comprehensive income (loss) attributable to ARC Document Solutions, Inc. shareholders
|
$
|
2,663
|
|
|
$
|
79,070
|
|
|
$
|
(51,223
|
)
|
|
$
|
92,447
|
|
|
ARC Document Solutions, Inc. Shareholders
|
|
|
|
|
|||||||||||||||||||||||||
|
Common Stock
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|||||||||||||||||
(In thousands, except per share data)
|
Shares
|
|
Par
Value
|
|
Additional Paid-in
Capital
|
|
Retained Earnings
|
|
Other Comprehensive
Loss
|
|
Common Stock in
Treasury
|
|
Noncontrolling
Interest
|
|
Total
|
|||||||||||||||
Balance at December 31, 2014
|
46,800
|
|
|
$
|
47
|
|
|
$
|
110,650
|
|
|
$
|
(7,353
|
)
|
|
$
|
(161
|
)
|
|
$
|
(408
|
)
|
|
$
|
7,063
|
|
|
$
|
109,838
|
|
Stock-based compensation
|
131
|
|
|
—
|
|
|
3,009
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,009
|
|
|||||||
Issuance of common stock under Employee Stock Purchase Plan
|
13
|
|
|
—
|
|
|
83
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
83
|
|
|||||||
Stock options exercised
|
125
|
|
|
—
|
|
|
562
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
562
|
|
|||||||
Treasury shares
|
24
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(204
|
)
|
|
—
|
|
|
(204
|
)
|
|||||||
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
93,979
|
|
|
—
|
|
|
—
|
|
|
225
|
|
|
94,204
|
|
|||||||
Foreign currency translation adjustments, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,269
|
)
|
|
—
|
|
|
(255
|
)
|
|
(1,524
|
)
|
|||||||
Fair value adjustment of derivatives, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(263
|
)
|
|
—
|
|
|
—
|
|
|
(263
|
)
|
|||||||
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
92,417
|
|
||||||||||||||
Balance at September 30, 2015
|
47,093
|
|
|
$
|
47
|
|
|
$
|
114,304
|
|
|
$
|
86,626
|
|
|
$
|
(1,693
|
)
|
|
$
|
(612
|
)
|
|
$
|
7,033
|
|
|
$
|
205,705
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
ARC Document Solutions, Inc. Shareholders
|
|
|
|
|
|||||||||||||||||||||||||
|
Common Stock
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|||||||||||||||||
(In thousands, except per share data)
|
Shares
|
|
Par
Value
|
|
Additional Paid-in
Capital
|
|
Retained
Earnings
|
|
Other Comprehensive
Loss
|
|
Common Stock in
Treasury
|
|
Noncontrolling
Interest
|
|
Total
|
|||||||||||||||
Balance at December 31, 2015
|
47,130
|
|
|
$
|
47
|
|
|
$
|
115,089
|
|
|
$
|
89,687
|
|
|
$
|
(2,097
|
)
|
|
$
|
(612
|
)
|
|
$
|
7,020
|
|
|
$
|
209,134
|
|
Stock-based compensation
|
229
|
|
|
—
|
|
|
2,073
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,073
|
|
|||||||
Issuance of common stock under Employee Stock Purchase Plan
|
28
|
|
|
—
|
|
|
96
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
96
|
|
|||||||
Stock options exercised
|
28
|
|
|
—
|
|
|
76
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
76
|
|
|||||||
Tax deficiency from stock based compensation
|
|
|
|
|
|
|
(70
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(70
|
)
|
|||||||
Treasury shares
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,297
|
)
|
|
—
|
|
|
(5,297
|
)
|
|||||||
Comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net (loss) income
|
—
|
|
|
—
|
|
|
—
|
|
|
(50,489
|
)
|
|
—
|
|
|
—
|
|
|
211
|
|
|
(50,278
|
)
|
|||||||
Foreign currency translation adjustments, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(684
|
)
|
|
—
|
|
|
(189
|
)
|
|
(873
|
)
|
|||||||
Fair value adjustment of derivatives, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(50
|
)
|
|
—
|
|
|
—
|
|
|
(50
|
)
|
|||||||
Comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(51,201
|
)
|
||||||||||||||
Balance at September 30, 2016
|
47,415
|
|
|
$
|
47
|
|
|
$
|
117,264
|
|
|
$
|
39,198
|
|
|
$
|
(2,831
|
)
|
|
$
|
(5,909
|
)
|
|
$
|
7,042
|
|
|
$
|
154,811
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
(In thousands)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
2,902
|
|
|
$
|
80,336
|
|
|
$
|
(50,278
|
)
|
|
$
|
94,204
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
|
|
||||||||
Allowance for accounts receivable
|
324
|
|
|
110
|
|
|
644
|
|
|
292
|
|
||||
Depreciation
|
6,697
|
|
|
7,040
|
|
|
20,032
|
|
|
21,184
|
|
||||
Amortization of intangible assets
|
1,160
|
|
|
1,375
|
|
|
3,705
|
|
|
4,306
|
|
||||
Amortization of deferred financing costs
|
111
|
|
|
138
|
|
|
344
|
|
|
460
|
|
||||
Goodwill impairment
|
—
|
|
|
—
|
|
|
73,920
|
|
|
—
|
|
||||
Stock-based compensation
|
650
|
|
|
735
|
|
|
2,073
|
|
|
2,739
|
|
||||
Deferred income taxes
|
2,299
|
|
|
2,198
|
|
|
(6,018
|
)
|
|
8,221
|
|
||||
Deferred tax valuation allowance
|
(1
|
)
|
|
(76,091
|
)
|
|
(16
|
)
|
|
(80,882
|
)
|
||||
Loss on early extinguishment of debt
|
66
|
|
|
96
|
|
|
156
|
|
|
193
|
|
||||
Other non-cash items, net
|
(87
|
)
|
|
(73
|
)
|
|
(540
|
)
|
|
(357
|
)
|
||||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
||||||||
Accounts receivable
|
(897
|
)
|
|
2,996
|
|
|
(2,285
|
)
|
|
(3,637
|
)
|
||||
Inventory
|
(429
|
)
|
|
1,083
|
|
|
(3,196
|
)
|
|
(1,775
|
)
|
||||
Prepaid expenses and other assets
|
1,179
|
|
|
1,224
|
|
|
513
|
|
|
2,941
|
|
||||
Accounts payable and accrued expenses
|
(1,811
|
)
|
|
(202
|
)
|
|
(5,008
|
)
|
|
(4,772
|
)
|
||||
Net cash provided by operating activities
|
12,163
|
|
|
20,965
|
|
|
34,046
|
|
|
43,117
|
|
||||
Cash flows from investing activities
|
|
|
|
|
|
|
|
||||||||
Capital expenditures
|
(2,430
|
)
|
|
(3,880
|
)
|
|
(7,580
|
)
|
|
(11,517
|
)
|
||||
Other
|
135
|
|
|
266
|
|
|
842
|
|
|
514
|
|
||||
Net cash used in investing activities
|
(2,295
|
)
|
|
(3,614
|
)
|
|
(6,738
|
)
|
|
(11,003
|
)
|
||||
Cash flows from financing activities
|
|
|
|
|
|
|
|
||||||||
Proceeds from stock option exercises
|
46
|
|
|
1
|
|
|
76
|
|
|
562
|
|
||||
Proceeds from issuance of common stock under Employee Stock Purchase Plan
|
26
|
|
|
25
|
|
|
96
|
|
|
83
|
|
||||
Share repurchases
|
(200
|
)
|
|
—
|
|
|
(5,297
|
)
|
|
(204
|
)
|
||||
Contingent consideration on prior acquisitions
|
(86
|
)
|
|
(360
|
)
|
|
(453
|
)
|
|
(360
|
)
|
||||
Early extinguishment of long-term debt
|
(7,000
|
)
|
|
(3,625
|
)
|
|
(16,000
|
)
|
|
(10,875
|
)
|
||||
Payments on long-term debt agreements and capital leases
|
(3,310
|
)
|
|
(7,262
|
)
|
|
(9,651
|
)
|
|
(20,042
|
)
|
||||
Net repayments under revolving credit facilities
|
—
|
|
|
(144
|
)
|
|
—
|
|
|
(1,888
|
)
|
||||
Payment of deferred financing costs
|
(76
|
)
|
|
—
|
|
|
(106
|
)
|
|
(25
|
)
|
||||
Payment of hedge premium
|
—
|
|
|
—
|
|
|
—
|
|
|
(632
|
)
|
||||
Net cash used in financing activities
|
(10,600
|
)
|
|
(11,365
|
)
|
|
(31,335
|
)
|
|
(33,381
|
)
|
||||
Effect of foreign currency translation on cash balances
|
(80
|
)
|
|
(598
|
)
|
|
(296
|
)
|
|
(545
|
)
|
||||
Net change in cash and cash equivalents
|
(812
|
)
|
|
5,388
|
|
|
(4,323
|
)
|
|
(1,812
|
)
|
||||
Cash and cash equivalents at beginning of period
|
20,452
|
|
|
15,436
|
|
|
23,963
|
|
|
22,636
|
|
||||
Cash and cash equivalents at end of period
|
$
|
19,640
|
|
|
$
|
20,824
|
|
|
$
|
19,640
|
|
|
$
|
20,824
|
|
Supplemental disclosure of cash flow information
|
|
|
|
|
|
|
|
||||||||
Noncash investing and financing activities
|
|
|
|
|
|
|
|
||||||||
Capital lease obligations incurred
|
$
|
3,738
|
|
|
$
|
2,625
|
|
|
$
|
12,345
|
|
|
$
|
9,667
|
|
Contingent liabilities in connection with acquisition of businesses
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
85
|
|
|
$
|
—
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Service Sales
|
|
|
|
|
|
|
|
||||||||
CDIM
|
$
|
53,228
|
|
|
$
|
54,710
|
|
|
$
|
161,753
|
|
|
$
|
168,187
|
|
MPS
|
32,796
|
|
|
35,923
|
|
|
100,082
|
|
|
108,934
|
|
||||
AIM
|
3,154
|
|
|
3,751
|
|
|
10,559
|
|
|
9,924
|
|
||||
Total service sales
|
89,178
|
|
|
94,384
|
|
|
272,394
|
|
|
287,045
|
|
||||
Equipment and supplies sales
|
11,265
|
|
|
12,034
|
|
|
35,369
|
|
|
37,081
|
|
||||
Total net sales
|
$
|
100,443
|
|
|
$
|
106,418
|
|
|
$
|
307,763
|
|
|
$
|
324,126
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
Weighted average common shares outstanding during the period—basic
|
45,599
|
|
|
46,698
|
|
|
46,055
|
|
|
46,601
|
|
Effect of dilutive stock options
|
590
|
|
|
859
|
|
|
—
|
|
|
940
|
|
Weighted average common shares outstanding during the period—diluted
|
46,189
|
|
|
47,557
|
|
|
46,055
|
|
|
47,541
|
|
|
Gross
Goodwill |
|
Accumulated
Impairment Loss |
|
Net
Carrying Amount |
||||||
|
|
|
|
|
|
||||||
January 1, 2015
|
$
|
405,558
|
|
|
$
|
192,950
|
|
|
$
|
212,608
|
|
Additions
|
—
|
|
|
—
|
|
|
—
|
|
|||
Goodwill impairment
|
—
|
|
|
—
|
|
|
—
|
|
|||
December 31, 2015
|
405,558
|
|
|
192,950
|
|
|
212,608
|
|
|||
Additions
|
—
|
|
|
—
|
|
|
—
|
|
|||
Goodwill impairment
|
—
|
|
|
73,920
|
|
|
(73,920
|
)
|
|||
September 30, 2016
|
$
|
405,558
|
|
|
$
|
266,870
|
|
|
$
|
138,688
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||||||||
Amortizable other intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Customer relationships
|
$
|
99,227
|
|
|
$
|
85,265
|
|
|
$
|
13,962
|
|
|
$
|
99,050
|
|
|
$
|
81,572
|
|
|
$
|
17,478
|
|
Trade names and trademarks
|
20,312
|
|
|
19,881
|
|
|
431
|
|
|
20,329
|
|
|
19,861
|
|
|
468
|
|
||||||
|
$
|
119,539
|
|
|
$
|
105,146
|
|
|
$
|
14,393
|
|
|
$
|
119,379
|
|
|
$
|
101,433
|
|
|
$
|
17,946
|
|
2016 (excluding the nine months ended September 30, 2016)
|
$
|
1,135
|
|
2017
|
4,267
|
|
|
2018
|
3,855
|
|
|
2019
|
3,134
|
|
|
2020
|
1,523
|
|
|
Thereafter
|
479
|
|
|
|
$
|
14,393
|
|
•
|
Future reversals of existing taxable temporary differences;
|
•
|
Future taxable income exclusive of reversing temporary differences and carryforwards;
|
•
|
Taxable income in prior carryback years; and
|
•
|
Tax-planning strategies.
|
•
|
Nature, frequency, and severity of recent losses;
|
•
|
Duration of statutory carryforward periods;
|
•
|
Historical experience with tax attributes expiring unused; and
|
•
|
Near- and medium-term financial outlook.
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
Term A loan facility maturing 2019 net of deferred financing fees of
$1,192
and $1,586;
2.59%
and 2.50% interest rate at September 30, 2016 and December 31, 2015
|
|
$
|
125,808
|
|
|
$
|
141,414
|
|
Various capital leases; weighted average interest rate of
5.6%
and 5.8% at September 30, 2016 and December 31, 2015; principal and interest payable monthly through September 2021
|
|
33,059
|
|
|
29,866
|
|
||
Various other notes payable with a weighted average interest rate of
10.7%
and 8.5% at September 30, 2016 and December 31, 2015; principal and interest payable monthly through November 2019
|
|
37
|
|
|
112
|
|
||
|
|
158,904
|
|
|
171,392
|
|
||
Less current portion
|
|
(12,926
|
)
|
|
(14,374
|
)
|
||
|
|
$
|
145,978
|
|
|
$
|
157,018
|
|
|
|
|
Fair Value
|
||||||
|
Balance Sheet Classification
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
Derivative designated as hedging instrument under ASC 815
|
|
|
|
|
|
||||
Interest rate cap contracts - current portion
|
Other current assets
|
|
$
|
12
|
|
|
$
|
48
|
|
Interest rate cap contracts - long-term portion
|
Other assets
|
|
11
|
|
|
191
|
|
||
Total derivatives designated as hedging instruments
|
|
|
$
|
23
|
|
|
$
|
239
|
|
|
|
Amount of Loss Reclassified from AOCL into Income
|
||||||||||||||||||||||||||||||
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||||||||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||||||||||||||||||
|
|
Effective Portion
|
|
Ineffective Portion
|
|
Effective Portion
|
|
Ineffective Portion
|
|
Effective Portion
|
|
Ineffective Portion
|
|
Effective Portion
|
|
Ineffective Portion
|
||||||||||||||||
Location of Loss Reclassified from AOCL into Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest expense
|
|
$
|
68
|
|
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
132
|
|
|
$
|
—
|
|
|
$
|
10
|
|
|
$
|
—
|
|
|
|
Significant Other Unobservable Inputs
|
||||||
|
|
September 30, 2016
|
||||||
|
|
Level 3
|
|
Total Losses
|
||||
Nonrecurring Fair Value Measure
|
|
|
|
|
||||
|
|
|
|
|
||||
Goodwill
|
|
$
|
138,688
|
|
|
$
|
73,920
|
|
|
|
|
|
|
|
|
|
Significant Other Unobservable Inputs
|
||||||||||||||||||||||
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
|
|
|
Level 2
|
|
Level 3
|
|
Total Losses
|
|
Level 2
|
|
Level 3
|
|
Total Losses
|
||||||||||||
Recurring Fair Value Measure
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Interest rate cap contracts
|
|
$
|
23
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
239
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Contingent purchase price consideration for acquired businesses
|
|
$
|
—
|
|
|
$
|
541
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,059
|
|
|
$
|
—
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Beginning balance
|
$
|
604
|
|
|
$
|
1,479
|
|
|
$
|
1,059
|
|
|
$
|
1,768
|
|
Additions related to acquisitions
|
—
|
|
|
—
|
|
|
104
|
|
|
—
|
|
||||
Payments
|
(86
|
)
|
|
(360
|
)
|
|
(453
|
)
|
|
(502
|
)
|
||||
Adjustments included in earnings
|
15
|
|
|
32
|
|
|
(180
|
)
|
|
2
|
|
||||
Foreign currency translation adjustments
|
8
|
|
|
(34
|
)
|
|
11
|
|
|
(151
|
)
|
||||
Ending balance
|
$
|
541
|
|
|
$
|
1,117
|
|
|
$
|
541
|
|
|
$
|
1,117
|
|
•
|
They do not reflect our cash expenditures, or future requirements for capital expenditures and contractual commitments;
|
•
|
They do not reflect changes in, or cash requirements for, our working capital needs;
|
•
|
They do not reflect the significant interest expense, or the cash requirements necessary, to service interest or principal payments on our debt;
|
•
|
Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA does not reflect any cash requirements for such replacements; and
|
•
|
Other companies, including companies in our industry, may calculate these measures differently than we do, limiting their usefulness as comparative measures.
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
(In thousands)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Cash flows provided by operating activities
|
$
|
12,163
|
|
|
$
|
20,965
|
|
|
$
|
34,046
|
|
|
$
|
43,117
|
|
Changes in operating assets and liabilities, net of effect of business acquisitions
|
1,958
|
|
|
(5,101
|
)
|
|
9,976
|
|
|
7,243
|
|
||||
Non-cash expenses, including depreciation, amortization and goodwill impairment
|
(11,219
|
)
|
|
64,472
|
|
|
(94,300
|
)
|
|
43,844
|
|
||||
Income tax provision (benefit)
|
2,162
|
|
|
(73,338
|
)
|
|
(5,884
|
)
|
|
(71,766
|
)
|
||||
Interest expense, net
|
1,563
|
|
|
1,679
|
|
|
4,535
|
|
|
5,475
|
|
||||
Income attributable to the noncontrolling interest
|
(61
|
)
|
|
(50
|
)
|
|
(211
|
)
|
|
(225
|
)
|
||||
Depreciation and amortization
|
7,857
|
|
|
8,415
|
|
|
23,737
|
|
|
25,490
|
|
||||
EBITDA
|
14,423
|
|
|
17,042
|
|
|
(28,101
|
)
|
|
53,178
|
|
||||
Interest expense, net
|
(1,563
|
)
|
|
(1,679
|
)
|
|
(4,535
|
)
|
|
(5,475
|
)
|
||||
Income tax (provision) benefit
|
(2,162
|
)
|
|
73,338
|
|
|
5,884
|
|
|
71,766
|
|
||||
Depreciation and amortization
|
(7,857
|
)
|
|
(8,415
|
)
|
|
(23,737
|
)
|
|
(25,490
|
)
|
||||
Net income (loss) attributable to ARC Document Solutions, Inc. shareholders
|
$
|
2,841
|
|
|
$
|
80,286
|
|
|
$
|
(50,489
|
)
|
|
$
|
93,979
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
(In thousands)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net income (loss) attributable to ARC Document Solutions, Inc. shareholders
|
$
|
2,841
|
|
|
$
|
80,286
|
|
|
$
|
(50,489
|
)
|
|
$
|
93,979
|
|
Interest expense, net
|
1,563
|
|
|
1,679
|
|
|
4,535
|
|
|
5,475
|
|
||||
Income tax provision (benefit)
|
2,162
|
|
|
(73,338
|
)
|
|
(5,884
|
)
|
|
(71,766
|
)
|
||||
Depreciation and amortization
|
7,857
|
|
|
8,415
|
|
|
23,737
|
|
|
25,490
|
|
||||
EBITDA
|
14,423
|
|
|
17,042
|
|
|
(28,101
|
)
|
|
53,178
|
|
||||
Loss on extinguishment of debt
|
66
|
|
|
96
|
|
|
156
|
|
|
193
|
|
||||
Goodwill impairment
|
—
|
|
|
—
|
|
|
73,920
|
|
|
—
|
|
||||
Trade secret litigation costs
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
34
|
|
||||
Restructuring expense
(2)
|
—
|
|
|
4
|
|
|
7
|
|
|
89
|
|
||||
Stock-based compensation
|
650
|
|
|
735
|
|
|
2,073
|
|
|
2,739
|
|
||||
Adjusted EBITDA
|
$
|
15,139
|
|
|
$
|
17,877
|
|
|
$
|
48,055
|
|
|
$
|
56,233
|
|
(1)
|
On February 1, 2013, we filed a civil complaint against a competitor and a former employee in the Superior Court of California for Orange County, which alleged, among other claims, the misappropriation of ARC trade secrets; namely, proprietary customer lists that were used to communicate with ARC customers in an attempt to unfairly acquire their business. In prior litigation with the competitor based on related facts, in 2007 the competitor entered into a settlement agreement and stipulated judgment, which included an injunction. We instituted this suit to stop the defendant from using similar unfair business practices against us in the Southern California market. The case proceeded to trial in May 2014, and a jury verdict was entered for the defendants. In the first quarter of 2015, we entered into a settlement and paid the defendant. Legal fees associated with the litigation were recorded as selling, general and administrative expense.
|
(2)
|
In October 2012, we initiated a restructuring plan which included the closure or downsizing of the Company's service center locations, as well as a reduction in headcount. Restructuring expenses in 2016 and 2015 primarily consist of revised estimated lease termination and obligation costs resulting from facilities closed in 2013.
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||
|
2016
|
|
2015
|
|
2016 (1)
|
|
2015
|
||||
Net income (loss) margin attributable to ARC
|
2.8
|
%
|
|
75.4
|
%
|
|
(16.4
|
)%
|
|
29.0
|
%
|
Interest expense, net
|
1.6
|
|
|
1.6
|
|
|
1.5
|
|
|
1.6
|
|
Income tax provision (benefit)
|
2.2
|
|
|
(68.9
|
)
|
|
(1.9
|
)
|
|
(22.1
|
)
|
Depreciation and amortization
|
7.8
|
|
|
7.9
|
|
|
7.7
|
|
|
7.9
|
|
EBITDA margin
|
14.4
|
|
|
16.0
|
|
|
(9.1
|
)
|
|
16.4
|
|
Loss on extinguishment of debt
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
Goodwill impairment
|
—
|
|
|
—
|
|
|
24.0
|
|
|
—
|
|
Trade secret litigation costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Restructuring expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Stock-based compensation
|
0.6
|
|
|
0.7
|
|
|
0.7
|
|
|
0.8
|
|
Adjusted EBITDA margin
|
15.1
|
%
|
|
16.8
|
%
|
|
15.6
|
%
|
|
17.3
|
%
|
(1)
|
Column does not foot due to rounding
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
(In thousands, except per share amounts)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net income (loss) attributable to ARC Document Solutions, Inc.
|
$
|
2,841
|
|
|
$
|
80,286
|
|
|
$
|
(50,489
|
)
|
|
$
|
93,979
|
|
Loss on extinguishment of debt
|
66
|
|
|
96
|
|
|
156
|
|
|
193
|
|
||||
Goodwill impairment
|
—
|
|
|
—
|
|
|
73,920
|
|
|
—
|
|
||||
Restructuring expense
|
—
|
|
|
4
|
|
|
7
|
|
|
89
|
|
||||
Trade secret litigation costs
|
—
|
|
|
—
|
|
|
—
|
|
|
34
|
|
||||
Income tax benefit related to above items
|
(26
|
)
|
|
(41
|
)
|
|
(13,395
|
)
|
|
(125
|
)
|
||||
Deferred tax valuation allowance and other discrete tax items
|
138
|
|
|
(76,147
|
)
|
|
341
|
|
|
(80,554
|
)
|
||||
Unaudited adjusted net income attributable to ARC Document Solutions, Inc.
|
$
|
3,019
|
|
|
$
|
4,198
|
|
|
$
|
10,540
|
|
|
$
|
13,616
|
|
|
|
|
|
|
|
|
|
||||||||
Actual:
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) per share attributable to ARC Document Solutions, Inc. shareholders:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.06
|
|
|
$
|
1.72
|
|
|
$
|
(1.10
|
)
|
|
$
|
2.02
|
|
Diluted
|
$
|
0.06
|
|
|
$
|
1.69
|
|
|
$
|
(1.10
|
)
|
|
$
|
1.98
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
45,599
|
|
|
46,698
|
|
|
46,055
|
|
|
46,601
|
|
||||
Diluted
|
46,189
|
|
|
47,557
|
|
|
46,055
|
|
|
47,541
|
|
||||
Adjusted:
|
|
|
|
|
|
|
|
||||||||
Earnings per share attributable to ARC Document Solutions, Inc. shareholders:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.07
|
|
|
$
|
0.09
|
|
|
$
|
0.23
|
|
|
$
|
0.29
|
|
Diluted
|
$
|
0.07
|
|
|
$
|
0.09
|
|
|
$
|
0.23
|
|
|
$
|
0.29
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
45,599
|
|
|
46,698
|
|
|
46,055
|
|
|
46,601
|
|
||||
Diluted
|
46,189
|
|
|
47,557
|
|
|
46,655
|
|
|
47,541
|
|
|
Three Months Ended September 30,
|
|
Increase (decrease)
|
|
Nine Months Ended
September 30, |
|
Increase (decrease)
|
||||||||||||||||||||||
(In millions, except percentages)
|
2016 (1)
|
|
2015
|
|
$
|
|
%
|
|
2016 (1)
|
|
2015
|
|
$
|
|
%
|
||||||||||||||
CDIM
|
$
|
53.2
|
|
|
$
|
54.7
|
|
|
$
|
(1.5
|
)
|
|
(2.7
|
)%
|
|
$
|
161.8
|
|
|
$
|
168.2
|
|
|
$
|
(6.4
|
)
|
|
(3.8
|
)%
|
MPS
|
32.8
|
|
|
35.9
|
|
|
(3.1
|
)
|
|
(8.7
|
)%
|
|
100.1
|
|
|
108.9
|
|
|
(8.9
|
)
|
|
(8.1
|
)%
|
||||||
AIM
|
3.2
|
|
|
3.8
|
|
|
(0.6
|
)
|
|
(15.9
|
)%
|
|
10.6
|
|
|
9.9
|
|
|
0.6
|
|
|
6.4
|
%
|
||||||
Total service sales
|
89.2
|
|
|
94.4
|
|
|
(5.2
|
)
|
|
(5.5
|
)%
|
|
272.4
|
|
|
287.0
|
|
|
(14.7
|
)
|
|
(5.1
|
)%
|
||||||
Equipment and supplies sales
|
11.3
|
|
|
12.0
|
|
|
(0.8
|
)
|
|
(6.4
|
)%
|
|
35.4
|
|
|
37.1
|
|
|
(1.7
|
)
|
|
(4.6
|
)%
|
||||||
Total net sales
|
$
|
100.4
|
|
|
$
|
106.4
|
|
|
$
|
(6.0
|
)
|
|
(5.6
|
)%
|
|
$
|
307.8
|
|
|
$
|
324.1
|
|
|
$
|
(16.4
|
)
|
|
(5.0
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Gross profit
|
$
|
32.7
|
|
|
$
|
35.9
|
|
|
$
|
(3.2
|
)
|
|
(8.9
|
)%
|
|
$
|
102.9
|
|
|
$
|
112.8
|
|
|
$
|
(10.0
|
)
|
|
(8.8
|
)%
|
Selling, general and administrative expenses
|
$
|
24.9
|
|
|
$
|
25.8
|
|
|
$
|
(0.9
|
)
|
|
(3.6
|
)%
|
|
$
|
76.8
|
|
|
$
|
80.4
|
|
|
$
|
(3.7
|
)
|
|
(4.5
|
)%
|
Amortization of intangibles
|
$
|
1.2
|
|
|
$
|
1.4
|
|
|
$
|
(0.2
|
)
|
|
(15.6
|
)%
|
|
$
|
3.7
|
|
|
$
|
4.3
|
|
|
$
|
(0.6
|
)
|
|
(14.0
|
)%
|
Goodwill impairment
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
73.9
|
|
|
$
|
—
|
|
|
$
|
73.9
|
|
|
100.0
|
%
|
Restructuring expense
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
(0.1
|
)
|
|
(92.1
|
)%
|
Loss on extinguishment of debt
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
(31.3
|
)%
|
|
$
|
0.2
|
|
|
$
|
0.2
|
|
|
$
|
—
|
|
|
(19.2
|
)%
|
Interest expense, net
|
$
|
1.6
|
|
|
$
|
1.7
|
|
|
$
|
(0.1
|
)
|
|
(6.9
|
)%
|
|
$
|
4.5
|
|
|
$
|
5.5
|
|
|
$
|
(0.9
|
)
|
|
(17.2
|
)%
|
Income tax provision (benefit)
|
$
|
2.2
|
|
|
$
|
(73.3
|
)
|
|
$
|
75.5
|
|
|
(102.9
|
)%
|
|
$
|
(5.9
|
)
|
|
$
|
(71.8
|
)
|
|
$
|
65.9
|
|
|
(91.8
|
)%
|
Net income (loss) attributable to ARC
|
$
|
2.8
|
|
|
$
|
80.3
|
|
|
$
|
(77.4
|
)
|
|
(96.5
|
)%
|
|
$
|
(50.5
|
)
|
|
$
|
94.0
|
|
|
$
|
(144.5
|
)
|
|
(153.7
|
)%
|
Adjusted net income attributable to ARC
|
$
|
3.0
|
|
|
$
|
4.2
|
|
|
$
|
(1.2
|
)
|
|
(28.1
|
)%
|
|
$
|
10.5
|
|
|
$
|
13.6
|
|
|
$
|
(3.1
|
)
|
|
(22.6
|
)%
|
EBITDA
|
$
|
14.4
|
|
|
$
|
17.0
|
|
|
$
|
(2.6
|
)
|
|
(15.4
|
)%
|
|
$
|
(28.1
|
)
|
|
$
|
53.2
|
|
|
$
|
(81.3
|
)
|
|
(152.8
|
)%
|
Adjusted EBITDA
|
$
|
15.1
|
|
|
$
|
17.9
|
|
|
$
|
(2.7
|
)
|
|
(15.3
|
)%
|
|
$
|
48.1
|
|
|
$
|
56.2
|
|
|
$
|
(8.2
|
)
|
|
(14.5
|
)%
|
(1)
|
Column does not foot due to rounding
|
|
As Percentage of Net Sales
|
|
As Percentage of Net Sales
|
||||||||
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
2016 (1)
|
|
2015 (1)
|
|
2016 (1)
|
|
2015 (1)
|
||||
Net Sales
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of sales
|
67.4
|
|
|
66.2
|
|
|
66.6
|
|
|
65.2
|
|
Gross profit
|
32.6
|
|
|
33.8
|
|
|
33.4
|
|
|
34.8
|
|
Selling, general and administrative expenses
|
24.8
|
|
|
24.3
|
|
|
24.9
|
|
|
24.8
|
|
Amortization of intangibles
|
1.2
|
|
|
1.3
|
|
|
1.2
|
|
|
1.3
|
|
Goodwill impairment
|
—
|
|
|
—
|
|
|
24.0
|
|
|
—
|
|
Restructuring expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Income (loss) from operations
|
6.6
|
|
|
8.2
|
|
|
(16.7
|
)
|
|
8.6
|
|
Loss on extinguishment of debt
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
Interest expense, net
|
1.6
|
|
|
1.6
|
|
|
1.5
|
|
|
1.6
|
|
Income (loss) before income tax provision (benefit)
|
5.0
|
|
|
6.6
|
|
|
(18.2
|
)
|
|
6.9
|
|
Income tax provision (benefit)
|
2.2
|
|
|
(68.9
|
)
|
|
(1.9
|
)
|
|
(22.1
|
)
|
Net income (loss)
|
2.9
|
|
|
75.5
|
|
|
(16.3
|
)
|
|
29.1
|
|
Income attributable to the noncontrolling interest
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
Net income (loss) attributable to ARC
|
2.8
|
%
|
|
75.4
|
%
|
|
(16.4
|
)%
|
|
29.0
|
%
|
EBITDA
|
14.4
|
%
|
|
16.0
|
%
|
|
(9.1
|
)%
|
|
16.4
|
%
|
Adjusted EBITDA
|
15.1
|
%
|
|
16.8
|
%
|
|
15.6
|
%
|
|
17.3
|
%
|
(1)
|
Column does not foot due to rounding
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
(In thousands)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net cash provided by operating activities
|
$
|
12,163
|
|
|
$
|
20,965
|
|
|
$
|
34,046
|
|
|
$
|
43,117
|
|
Net cash used in investing activities
|
$
|
(2,295
|
)
|
|
$
|
(3,614
|
)
|
|
$
|
(6,738
|
)
|
|
$
|
(11,003
|
)
|
Net cash used in financing activities
|
$
|
(10,600
|
)
|
|
$
|
(11,365
|
)
|
|
$
|
(31,335
|
)
|
|
$
|
(33,381
|
)
|
(In thousands)
|
September 30, 2016
|
|
December 31, 2015
|
||||
Cash and cash equivalents
|
$
|
19,640
|
|
|
$
|
23,963
|
|
Working capital
|
$
|
46,719
|
|
|
$
|
40,031
|
|
|
|
|
|
||||
Borrowings from term loan facility (1)
|
$
|
125,808
|
|
|
$
|
141,414
|
|
Other debt obligations
|
33,096
|
|
|
29,978
|
|
||
Total debt obligations
|
$
|
158,904
|
|
|
$
|
171,392
|
|
(Dollars in thousands)
|
Number of
Reporting
Units
|
|
Representing
Goodwill of
|
|||
No goodwill balance
|
5
|
|
|
$
|
—
|
|
Reporting unit failing step one that continues to carry a goodwill balance
|
1
|
|
|
17,637
|
|
|
Fair value of reporting units exceeds their carrying values by more than 100%
|
2
|
|
|
121,051
|
|
|
|
8
|
|
|
$
|
138,688
|
|
•
|
Future reversals of existing taxable temporary differences;
|
•
|
Future taxable income exclusive of reversing temporary differences and carryforwards;
|
•
|
Taxable income in prior carryback years; and
|
•
|
Tax-planning strategies.
|
•
|
Nature, frequency, and severity of recent losses;
|
•
|
Duration of statutory carryforward periods;
|
•
|
Historical experience with tax attributes expiring unused; and
|
•
|
Near- and medium-term financial outlook.
|
(In thousands, except for price per share)
|
|
(a) Total Number of
Shares Purchased (1) |
|
(b) Average Price Paid per Share ($)
|
|
(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
(d) Approximate Dollar Value of Shares That May Yet Be Purchased Under The Plans or Programs (1)
|
||||||
Period
|
|
|
|
|
|
|
|
|
||||||
July 1, 2016—July 31, 2016
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
August 1, 2016—August 31, 2016
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
September 1, 2016—September 30, 2016
|
|
58
|
|
|
$
|
3.44
|
|
|
58
|
|
|
$
|
9,636
|
|
Total
|
|
58
|
|
|
|
|
|
58
|
|
|
|
(1)
|
On February 8, 2016, we announced that the Company's Board of Directors approved a stock repurchase program that authorizes the Company to purchase up to $15.0 million of the Company's outstanding common stock through December 31, 2017.
|
Exhibit
Number
|
|
Description
|
|
|
|
31.1
|
|
Certification of Principal Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
|
|
|
|
31.2
|
|
Certification of Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
|
|
|
|
32.1
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
|
|
|
|
32.2
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
|
|
|
|
101.INS
|
|
XBRL Instance Document *
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema *
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase *
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase *
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase *
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase *
|
*
|
Filed herewith
|
ARC DOCUMENT SOLUTIONS, INC.
|
|
/s/ KUMARAKULASINGAM SURIYAKUMAR
|
Kumarakulasingam Suriyakumar
|
Chairman, President and Chief Executive Officer
|
|
/s/ JORGE AVALOS
|
Jorge Avalos
|
Chief Financial Officer
|
Exhibit
Number
|
|
Description
|
|
|
|
31.1
|
|
Certification of Principal Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
|
|
|
|
31.2
|
|
Certification of Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
|
|
|
|
32.1
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
|
|
|
|
32.2
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
|
|
|
|
101.INS
|
|
XBRL Instance Document *
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema *
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase *
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase *
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase *
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase *
|
*
|
Filed herewith
|
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