11-6-13 4:05 PM EST | Email Article
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WALNUT CREEK, CA -- (Marketwired) -- 11/06/13 -- ARC Document Solutions, Inc. (NYSE: ARC), the nation's leading document solutions provider for the architecture, engineering, and construction (AEC) industry, today reported its financial results for the third quarter ended September 30, 2013.

Business Highlights:

  • Quarterly revenue grew year-over-year for first time in five years
  • Q3 adjusted earnings per share of $0.02 vs. $(0.04) in Q3 2012
  • Gross margin in Q3 of 32.5%; year-over-year increase of 310 basis points
  • Q3 Adjusted EBITDA margin of 16.3%; year-over-year increase of 320 basis points
  • YTD cash flow from operations of $40.0 million vs. $30.9 million for the same period last year
  • Maintains 2013 fully-diluted annual adjusted earnings per share forecast to be in the range $0.06 to $0.09 and maintains projected 2013 annual cash provided by operating activities to be in the range of $38-$45 million


Financial Highlights:
                                  Three Months Ended     Nine Months Ended
                                     September 30,         September 30,
                                 --------------------  --------------------
(All dollar amounts in millions,
 except EPS)                        2013       2012       2013       2012
                                 ---------  ---------  ---------  ---------
Net Revenue                      $   101.3  $    99.4  $   305.9  $   309.2
Gross Margin                          32.5%      29.4%      33.0%      30.7%
Net (loss) Income attributable
 to ARC                          $    (0.5) $   (20.1) $     0.7  $   (26.1)
Adjusted Net Income (loss)
 attributable to ARC             $     0.8  $    (1.7) $     3.0  $    (0.9)
Earnings (loss) per share        $   (0.01) $   (0.44) $    0.01  $   (0.57)
Adjusted earnings (loss) per
 share                           $    0.02  $   (0.04) $    0.07  $   (0.02)
Cash provided by operating
 activities                      $    20.0  $    14.0  $    40.0  $    30.9
Capital Expenditures             $     4.8  $     4.9  $    14.9  $    14.2
Debt & Capital Leases (including
 current)                                              $   213.4  $   224.2


Management Commentary
"We're very happy to have achieved year-over-year organic growth in the third quarter," said K. "Suri" Suriyakumar, Chairman, President and CEO of ARC Document Solutions, Inc. "After five long years of an unprecedented downturn in the industry, it's exciting to see our sales trend in a positive direction again."

"While the non-residential segment of our business has yet to recover, our impressive performance is attributable to the excellent execution of the management team," Mr. Suriyakumar continued. "On a year-over-year basis we have significantly improved our gross margins, and by positioning ourselves as a document solutions provider, we have dramatically expanded our addressable market. Sales of onsite services are now the largest segment of our business, surpassing our traditional reprographics line for the second quarter in a row, we've continued to receive recognition for our innovation in managed print services, and our color services sales have improved year-over-year. We intend to build on these strong performance trends in 2014 as our markets pick up steam."

"We are continuing to make progress expanding our margins, increasing our cashflow, and changing our capital structure -- the very things we promised to do in the fourth quarter of 2012," said John Toth, ARC Document Solution's Chief Financial Officer. "Adjusted EBITDA margin for the quarter improved by 320 basis points from a year ago, our cash position improved 21% year-over-year even after $11 million of cash outlays for bond repurchases and restructuring payments during the period, and we generated an increase of 51% in free cash flow over the same period last year."

Mr. Toth continued, "Thanks to the seven million dollar re-purchase of our bonds early in the third quarter and stronger margin performance, we've also made significant progress on our debt-to-EBITDA ratio which is now 3.3 as compared to 3.6 in the second quarter. We're in an excellent position to end the year with strength and momentum to carry us forward in 2014."

2013 Third Quarter Supplemental Information:
Net sales were $101.3 million, a 2% increase compared to the third quarter of 2012.

Days sales outstanding in Q3 2013 were 52, which were consistent with 52 days in Q3 2012.

AEC customers comprised approximately 76% of our total net sales, while non-AEC customers made up 24% of our total net sales.

Total number of Onsite Services contracts was approximately 7,500, a gain of nearly 200 contracts in Q3 2013.


Sales from Services and Product Lines as a Percentage of
 Net Sales
                                                         Three Months Ended
                                                            September 30,
                                                         ------------------
Services and Product Line                                  2013      2012
                                                         --------  --------
Traditional Reprographics                                    28.5%     31.0%
Onsite Services                                              30.6%     27.3%
Color Services                                               20.4%     19.4%
Digital Services                                              8.2%      8.6%
Equipment and Supplies Sales                                 12.3%     13.7%


Sales Reporting Format
In February 2013, ARC Document Solutions announced that in its statement of operations the Company would begin reporting net sales under "Service sales" and "Equipment and supplies sales" to better identify and report its individual services and product lines. The two new categories replace the three categories previously used to report net sales of "Reprographics services," "Facilities management," and "Equipment and supplies sales."

"Service sales" includes traditional reprographics services, onsite services, color printing services, and digital services. "Equipment and supplies sales" is self-explanatory. Net sales for the individual services and product lines that comprise each category are reported and reconciled in the Company's "Net Sales by Services and Product Line" table included herein. For historical comparisons, please consult the Company's 2012 annual report on Form 10-K.

Outlook:
ARC Document Solutions maintained its annual adjusted earnings per share forecast for 2013 to be in the range of $0.06 to $0.09 on a fully-diluted basis, and its annual cash flow provided by operations to be in the range of $38 million to $45 million.

Teleconference and Webcast:
ARC Document Solutions will host a conference call and audio webcast today at 2:00 P.M. Pacific Time (5:00 P.M. Eastern Time) to discuss results for the Company's third quarter of 2013. To access the live audio call, dial 1-877-638-9067. International callers may join the conference by dialing 647-438-1131. The conference ID number is 5660213. A live webcast will also be made available on the investor relations page of ARC Document Solution's website at www.e-arc.com.

A replay of the call will be available for seven days after the call's conclusion. To access the replay, dial 1-888-203-1112. International callers may access the replay by dialing 719-457-0820. The conference ID number is 5660213. The webcast will also be made available at www.e-arc.com for approximately 90 days following the call's conclusion.

About ARC Document Solutions (NYSE: ARC)
ARC Document Solutions is a leading document solutions company serving businesses of all types, with an emphasis on the non-residential segment of the architecture, engineering and construction industries. The Company helps more than 90,000 customers reduce costs and increase efficiency in the use of their documents, improve document access and control, and offers a wide variety of ways to print, produce, and store documents. ARC provides its solutions onsite in more than 7,000 of its customers' offices, offsite in service centers around the world, and digitally in the form of proprietary software and web applications. For more information please visit www.e-arc.com.

Forward-Looking Statements
This press release contains forward-looking statements that are based on current opinions, estimates and assumptions of management regarding future events and the future financial performance of the Company. Words such as "expected," "consider" "intended," and similar expressions identify forward-looking statements and all statements other than statements of historical fact, including, but not limited to, any projections regarding earnings, revenues and financial performance of the Company, could be deemed forward-looking statements. We caution you that such statements are only predictions and are subject to certain risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements. In addition to matters affecting the construction, managed print services, document management or reprographics industries, or the economy generally, factors that could cause actual results to differ from expectations stated in forward-looking statements include, among others, the factors described in the caption entitled "Risk Factors" in Item 1A in ARC Document Solution's Annual Report on Form 10-K for the fiscal year ended December 31, 2012, Quarterly Reports on Form 10-Q, and other periodic filings and prospectuses. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.


ARC Document Solutions, Inc.
Consolidated Balance Sheets
(Dollars in thousands, except per share data)
(Unaudited)
                                                September 30,  December 31,
                                               -------------- --------------
Current assets:                                     2013           2012
                                               -------------- --------------
  Cash and cash equivalents                    $       37,054 $       28,021
  Accounts receivable, net of allowances for
   accounts receivable of $2,672 and $2,634            58,643         51,855
  Inventories, net                                     13,750         14,251
  Deferred income taxes                                   468             --
  Prepaid expenses                                      4,711          3,277
  Other current assets                                  3,418          6,819
                                               -------------- --------------
    Total current assets                              118,044        104,223
Property and equipment, net of accumulated
 depreciation of $204,231 and $197,830                 56,367         56,471
Goodwill                                              212,608        212,608
Other intangible assets, net                           29,436         34,498
Deferred financing fees, net                            3,291          4,219
Deferred income taxes                                   1,269          1,246
Other assets                                            2,591          2,574
                                               -------------- --------------
    Total assets                               $      423,606 $      415,839
                                               ============== ==============
Current liabilities:
  Accounts payable                             $       21,889 $       21,215
  Accrued payroll and payroll-related expenses         12,834          6,774
  Accrued expenses                                     27,623         22,321
  Current portion of long-term debt and
   capital leases                                      11,505         13,263
                                               -------------- --------------
    Total current liabilities                          73,851         63,573
Long-term debt and capital leases                     201,880        209,262
Deferred income taxes                                  30,938         28,936
Other long-term liabilities                             3,122          3,231
                                               -------------- --------------
    Total liabilities                                 309,791        305,002
                                               -------------- --------------
Commitments and contingencies
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; 46,356 and 46,274 shares
   issued and 46,316 and 46,262 shares
   outstanding                                             46             46
  Additional paid-in capital                          104,572        102,510
  Retained earnings                                     1,382            695
  Accumulated other comprehensive income                  736            689
                                               -------------- --------------
                                                      106,736        103,940
  Less cost of common stock in treasury, 40
   and 12 shares                                          134             44
                                               -------------- --------------
    Total ARC Document Solutions, Inc.
     stockholders' equity                             106,602        103,896
Noncontrolling interest                                 7,213          6,941
                                               -------------- --------------
    Total equity                                      113,815        110,837
                                               -------------- --------------
    Total liabilities and equity               $      423,606 $      415,839
                                               ============== ==============



ARC Document Solutions, Inc.
Consolidated Statements of Operations
(Dollars in thousands, except per share data)
(Unaudited)                       Three Months Ended     Nine Months Ended
                                     September 30,         September 30,
                                 --------------------  --------------------
                                    2013       2012       2013       2012
                                 ---------  ---------  ---------  ---------
Service sales                    $  88,830  $  85,836  $ 268,258  $ 267,291
Equipment and supplies sales        12,422     13,590     37,652     41,936
                                 ---------  ---------  ---------  ---------
  Total net sales                  101,252     99,426    305,910    309,227
Cost of sales                       68,372     70,178    205,040    214,348
                                 ---------  ---------  ---------  ---------
  Gross profit                      32,880     29,248    100,870     94,879
Selling, general and
 administrative expenses            24,019     23,916     72,683     71,346
Amortization of intangible
 assets                              1,610      1,846      5,056      9,244
Goodwill impairment                     --     16,707         --     16,707
Restructuring expense                  657         --      1,765         --
                                 ---------  ---------  ---------  ---------
  Income (loss) from operations      6,594    (13,221)    21,366     (2,418)
Other income                           (25)       (25)       (86)       (79)
Loss on extinguishment of debt         262         --        262         --
Interest expense, net                5,895      6,982     18,012     21,675
                                 ---------  ---------  ---------  ---------
  Income (loss) before income
   tax provision (benefit)             462    (20,178)     3,178    (24,014)
Income tax provision (benefit)         790        (84)     1,946      1,845
                                 ---------  ---------  ---------  ---------
  Net (loss) income                   (328)   (20,094)     1,232    (25,859)
Income attributable to
 noncontrolling interest              (122)       (18)      (545)      (213)
                                 ---------  ---------  ---------  ---------
  Net (loss) income attributable
   to ARC Document Solutions,
   Inc. shareholders             $    (450) $ (20,112) $     687  $ (26,072)
                                 =========  =========  =========  =========
(Loss) earnings per share
 attributable to ARC Document
 Solutions, Inc. shareholders:
  Basic                          $   (0.01) $   (0.44) $    0.01  $   (0.57)
                                 =========  =========  =========  =========
  Diluted                        $   (0.01) $   (0.44) $    0.01  $   (0.57)
                                 =========  =========  =========  =========
Weighted average common shares
 outstanding:
  Basic                             45,976     45,716     45,880     45,641
  Diluted                           45,976     45,716     45,947     45,641



ARC Document Solutions, Inc.
Non-GAAP Measures
Reconciliation of cash flows provided by operating activities to EBIT,
 EBITDA and Adjusted EBITDA
(Dollars in thousands)
(Unaudited)
                                  Three Months Ended     Nine Months Ended
                                     September 30,         September 30,
                                 --------------------  --------------------
                                    2013       2012       2013       2012
                                 ---------  ---------  ---------  ---------
Cash flows provided by operating
 activities (1)                  $  20,019  $  14,029  $  40,010  $  30,879
  Changes in operating assets
   and liabilities, net of
   effect of business
   acquisitions                     (9,575)    (6,893)    (7,017)    (2,110)
  Non-cash expenses, including
   depreciation, amortization
   and restructuring               (10,772)   (27,230)   (31,761)   (54,628)
  Income tax provision (benefit)       790        (84)     1,946      1,845
  Interest expense, net              5,895      6,982     18,012     21,675
  Income attributable to the
   noncontrolling interest            (122)       (18)      (545)      (213)
                                 ---------  ---------  ---------  ---------
EBIT                                 6,235    (13,214)    20,645     (2,552)
  Depreciation and amortization      8,669      8,989     26,090     30,510
                                 ---------  ---------  ---------  ---------
EBITDA                              14,904     (4,225)    46,735     27,958
  Loss on extinguishment of debt       262         --        262         --
  Goodwill impairment                   --     16,707         --     16,707
  Restructuring expense                657         --      1,765         --
  Stock-based compensation             728        554      2,049      1,457
                                 ---------  ---------  ---------  ---------
Adjusted EBITDA                  $  16,551  $  13,036  $  50,811  $  46,122
                                 =========  =========  =========  =========

(1) For the three and nine months ended September 30, 2013 cash flows provided by operating activities includes $0.7 million and $3.3 million, respectively, in cash payments related to restructuring.



ARC Document Solutions, Inc.
Non-GAAP Measures
Reconciliation of net (loss) income attributable to ARC to unaudited
 adjusted net income (loss) attributable to ARC
(Dollars in thousands, except per share data)
(Unaudited)
                                  Three Months Ended     Nine Months Ended
                                     September 30,         September 30,
                                 --------------------  --------------------
                                    2013       2012       2013       2012
                                 ---------  ---------  ---------  ---------
Net (loss) income attributable
 to ARC Document Solutions, Inc. $    (450) $ (20,112) $     687  $ (26,072)
  Loss on extinguishment of debt       262         --        262         --
  Goodwill impairment                   --     16,707         --     16,707
  Restructuring expense                657         --      1,765         --
  Change in trade name impact to
   amortization                         --         --         --      3,158
  Interest rate swap related
   costs                                --        776         --      3,047
  Income tax benefit related to
   above items                        (359)    (4,230)      (790)    (6,279)
  Deferred tax valuation
   allowance and other discrete
   tax items                           685      5,142      1,073      8,575
                                 ---------  ---------  ---------  ---------
Unaudited adjusted net income
 (loss) attributable to ARC
 Document Solutions, Inc.        $     795  $  (1,717) $   2,997  $    (864)
                                 =========  =========  =========  =========
Actual:
(Loss) earnings per share
 attributable to ARC Document
 Solutions, Inc. shareholders:
  Basic                          $   (0.01) $   (0.44) $    0.01  $   (0.57)
                                 =========  =========  =========  =========
  Diluted                        $   (0.01) $   (0.44) $    0.01  $   (0.57)
                                 =========  =========  =========  =========
Weighted average common shares
 outstanding:
  Basic                             45,976     45,716     45,880     45,641
  Diluted                           45,976     45,716     45,947     45,641
Adjusted:
Earnings (loss) per share
 attributable to ARC Document
 Solutions, Inc. shareholders:
  Basic                          $    0.02  $   (0.04) $    0.07  $   (0.02)
                                 =========  =========  =========  =========
  Diluted                        $    0.02  $   (0.04) $    0.07  $   (0.02)
                                 =========  =========  =========  =========
Weighted average common shares
 outstanding:
  Basic                             45,976     45,716     45,880     45,641
  Diluted                           46,487     45,716     45,947     45,641



ARC Document Solutions, Inc.
Non-GAAP Measures
Reconciliation of net (loss) income attributable to ARC Document Solutions,
 Inc. shareholders to EBIT, EBITDA and Adjusted EBITDA
(Dollars in thousands)
(Unaudited)
                                   Three Months Ended    Nine Months Ended
                                      September 30,        September 30,
                                  --------------------  -------------------
                                     2013       2012       2013      2012
                                  ---------  ---------  --------- ---------
Net (loss) income attributable to
 ARC Document Solutions, Inc.
 shareholders                     $    (450) $ (20,112) $     687 $ (26,072)
  Interest expense, net               5,895      6,982     18,012    21,675
  Income tax provision (benefit)        790        (84)     1,946     1,845
                                  ---------  ---------  --------- ---------
EBIT                                  6,235    (13,214)    20,645    (2,552)
  Depreciation and amortization       8,669      8,989     26,090    30,510
                                  ---------  ---------  --------- ---------
EBITDA                               14,904     (4,225)    46,735    27,958
  Loss on extinguishment of debt        262         --        262        --
  Goodwill impairment                    --     16,707         --    16,707
  Restructuring expense                 657         --      1,765        --
  Stock-based compensation              728        554      2,049     1,457
                                  ---------  ---------  --------- ---------
Adjusted EBITDA                   $  16,551  $  13,036  $  50,811 $  46,122
                                  =========  =========  ========= =========



ARC Document Solutions, Inc.
Net Sales by Product Line
(Dollars in thousands)
(Unaudited)
                                   Three Months Ended    Nine Months Ended
                                      September 30,        September 30,
                                  --------------------  -------------------
                                     2013       2012       2013      2012
                                  ---------  ---------  --------- ---------
Service Sales
Traditional reprographics         $  28,907  $  30,820  $  88,981 $  98,427
Color                                20,638     19,335     63,389    59,839
Digital                               8,295      8,565     25,346    27,763
                                  ---------  ---------  --------- ---------
  Subtotal(1)                        57,840     58,720    177,716   186,029
Onsite services(2)                   30,990     27,116     90,542    81,262
                                  ---------  ---------  --------- ---------
  Total services sales               88,830     85,836    268,258   267,291
Equipment and supplies sales         12,422     13,590     37,652    41,936
                                  ---------  ---------  --------- ---------
  Total net sales                 $ 101,252  $  99,426  $ 305,910 $ 309,227
                                  =========  =========  ========= =========

(1) For comparison purposes this subtotal agrees with reprographics services historically reported prior to the 2012 Annual Report on Form 10-K.

(2) Represents work done at our customer sites, which includes Facilities Management ("FM") and Managed Print Services ("MPS").

Non-GAAP Financial Measures.
EBIT, EBITDA and related ratios presented in this report are supplemental measures of our performance that are not required by or presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). These measures are not measurements of our financial performance under GAAP and should not be considered as alternatives to net income, income from operations, or any other performance measures derived in accordance with GAAP or as an alternative to cash flows from operating, investing or financing activities as a measure of our liquidity.

EBIT represents net income before interest and taxes. EBITDA represents net income before interest, taxes, depreciation and amortization. EBIT margin is a non-GAAP measure calculated by dividing EBIT by net sales. EBITDA margin is a non-GAAP measure calculated by dividing EBITDA by net sales.

We present EBIT, EBITDA and related ratios because we consider them important supplemental measures of our performance and liquidity. We believe investors may also find these measures meaningful, given how our management makes use of them. The following is a discussion of our use of these measures.

We use EBIT and EBITDA to measure and compare the performance of our operating segments. Our operating segments' financial performance includes all of the operating activities except debt and taxation which are managed at the corporate level for U.S. operating segments. As a result, we believe EBIT is the best measure of operating segment profitability and the most useful metric by which to measure and compare the performance of our operating segments. We also use EBIT to measure performance for determining operating segment-level compensation and we use EBITDA to measure performance for determining consolidated-level compensation. In addition, we use EBIT and EBITDA to evaluate potential acquisitions and potential capital expenditures.

EBIT, EBITDA and related ratios have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are as follows:

  • 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.

Because of these limitations, EBIT, EBITDA, and related ratios should not be considered as measures of discretionary cash available to us to invest in business growth or to reduce our indebtedness. We compensate for these limitations by relying primarily on our GAAP results and using EBIT, EBITDA and related ratios only as supplements. For more information, see our interim Condensed Consolidated Financial Statements and related notes on our 2013 third quarter report on Form 10-Q. Additionally, please refer to our 2012 Annual Report on Form 10-K.

Our presentation of adjusted net income and adjusted EBITDA over certain periods is an attempt to provide meaningful comparisons to our historical performance for our existing and future investors. The unprecedented changes in our end markets over the past several years have required us to take measures that are unique in our history and specific to individual circumstances. Comparisons inclusive of these actions make normal financial and other performance patterns difficult to discern under a strict GAAP presentation. Each non-GAAP presentation, however, is explained in detail in the reconciliation tables above.

Specifically, we have presented adjusted net income (loss) attributable to ARC and adjusted earnings (loss) per share attributable to ARC shareholders for the three and nine months ended September 30, 2013 and 2012 to reflect the exclusion of amortization impact related specifically to the change in useful lives of trade names, loss on extinguishment of debt, goodwill impairment, restructuring expense, interest rate swap related costs, and changes in the valuation allowances related to certain deferred tax assets and other discrete tax items. This presentation facilitates a meaningful comparison of our operating results for the three and nine months ended September 30, 2013 and 2012. We believe these charges were the result of the current macroeconomic environment, our capital restructuring, or other items which are not indicative of our actual operating performance.

We presented adjusted EBITDA in three and nine months ended September 30, 2013 and 2012 to exclude stock-based compensation expense, restructuring expense, goodwill impairment and loss on extinguishment of debt. The adjustment of EBITDA for non-cash adjustments is consistent with the definition of adjusted EBITDA in our credit agreement; therefore, we believe this information is useful to investors in assessing our financial performance.


ARC Document Solutions
Consolidated Statements of Cash Flows
(Dollars in thousands)
(Unaudited)                       Three Months Ended     Nine Months Ended
                                     September 30,         September 30,
                                 --------------------  --------------------
                                    2013       2012       2013       2012
                                 ---------  ---------  ---------  ---------
Cash flows from operating
 activities
Net (loss) income                $    (328) $ (20,094) $   1,232  $ (25,859)
Adjustments to reconcile net
 (loss) income to net cash
 provided by operating
 activities:
  Allowance for accounts
   receivable                          105        128        551        532
  Depreciation                       7,059      7,143     21,034     21,266
  Amortization of intangible
   assets                            1,610      1,846      5,056      9,244
  Amortization of deferred
   financing costs                     270        276        831        812
  Amortization of bond discount        168        156        500        453
  Goodwill impairment                   --     16,707         --     16,707
  Stock-based compensation             728        554      2,049      1,457
  Deferred income taxes                182     (3,797)       918     (4,301)
  Deferred tax valuation
   allowance                           386      3,854        560      6,766
  Restructuring expense, non-
   cash portion                         70         --        363         --
  Amortization of derivative,
   net of tax effect                    --        486         --      1,908
  Other non-cash items, net            194       (123)      (101)      (216)
  Changes in operating assets
   and liabilities, net of
   effect of business
   acquisitions:
    Accounts receivable              4,491      2,796     (7,358)    (3,331)
    Inventory                          441     (1,081)       721     (2,666)
    Prepaid expenses and other
     assets                         (1,102)      (795)     1,988     (1,201)
    Accounts payable and accrued
     expenses                        5,745      5,973     11,666      9,308
                                 ---------  ---------  ---------  ---------
Net cash provided by operating
 activities                         20,019     14,029     40,010     30,879
                                 ---------  ---------  ---------  ---------
Cash flows from investing
 activities
Capital expenditures                (4,814)    (4,932)   (14,856)   (14,194)
Other                                   83        317        622        133
                                 ---------  ---------  ---------  ---------
Net cash used in investing
 activities                         (4,731)    (4,615)   (14,234)   (14,061)
                                 ---------  ---------  ---------  ---------
Cash flows from financing
 activities
Proceeds from stock option
 exercises                              --         --         --         79
Proceeds from issuance of common
 stock under Employee Stock
 Purchase Plan                           4         --         13         28
Share repurchases, including
 shares surrendered for tax
 withholding                            --         --        (90)        --
Proceeds from borrowings on
 long-term debt agreements              --         --        402         --
Payments of debt extinguishment
 costs                                 (66)        --        (66)        --
Early extinguishment of long-
 term debt                          (7,000)        --     (7,000)        --
Payments on long-term debt
 agreements and capital leases      (2,988)    (3,575)    (9,395)   (12,041)
Net (repayments) borrowings
 under revolving credit
 facilities                           (228)     1,424       (438)     1,041
Payment of deferred financing
 costs                                  --         --         --       (839)
Dividends paid to noncontrolling
 interest                             (485)        --       (485)        --
                                 ---------  ---------  ---------  ---------
Net cash used in financing
 activities                        (10,763)    (2,151)   (17,059)   (11,732)
                                 ---------  ---------  ---------  ---------
Effect of foreign currency
 translation on cash balances          152        (47)       316         11
                                 ---------  ---------  ---------  ---------
Net change in cash and cash
 equivalents                         4,677      7,216      9,033      5,097
Cash and cash equivalents at
 beginning of period                32,377     23,318     28,021     25,437
                                 ---------  ---------  ---------  ---------
Cash and cash equivalents at end
 of period                       $  37,054  $  30,534  $  37,054  $  30,534
                                 =========  =========  =========  =========
Supplemental disclosure of cash
 flow information
Noncash financing activities
  Capital lease obligations
   incurred                      $   2,491  $   1,781  $   6,737  $   8,511


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Morningstar - 2013/11/6 - ARC Document Solutions Reports Results for Third Quarter 2013
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