WALNUT CREEK, Calif.,
Nov. 1, 2017 /PRNewswire/ -- ARC Document Solutions, Inc.
(NYSE: ARC), a leading document solutions provider to design,
engineering, construction, and facilities management professionals,
today reported its financial results for the third quarter ended
September 30, 2017.
Financial
Highlights:
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
(All dollar
amounts in millions, except EPS)
|
2017
|
2016
|
|
2017
|
2016
|
Net Sales
|
$
|
96.5
|
|
$
|
100.4
|
|
|
$
|
297.5
|
|
$
|
307.8
|
|
Gross
Margin
|
30.3
|
%
|
32.6
|
%
|
|
31.8
|
%
|
33.4
|
%
|
Goodwill
impairment
|
$
|
17.6
|
|
$
|
—
|
|
|
$
|
17.6
|
|
$
|
73.9
|
|
Net (loss) income
attributable to ARC
|
$
|
(14.8)
|
|
$
|
2.8
|
|
|
$
|
(9.4)
|
|
$
|
(50.5)
|
|
Adjusted net income
attributable to ARC
|
$
|
0.4
|
|
$
|
3.0
|
|
|
$
|
5.9
|
|
$
|
10.5
|
|
Earnings per share -
Diluted
|
$
|
(0.32)
|
|
$
|
0.06
|
|
|
$
|
(0.20)
|
|
$
|
(1.10)
|
|
Adjusted earnings per
share - Diluted
|
$
|
0.01
|
|
$
|
0.07
|
|
|
$
|
0.13
|
|
$
|
0.23
|
|
Cash provided by
operating activities
|
$
|
11.3
|
|
$
|
12.2
|
|
|
$
|
36.8
|
|
$
|
34.0
|
|
EBITDA
|
$
|
(7.0)
|
|
$
|
14.4
|
|
|
$
|
21.9
|
|
$
|
(28.1)
|
|
Adjusted
EBITDA
|
$
|
11.5
|
|
$
|
15.1
|
|
|
$
|
42.1
|
|
$
|
48.1
|
|
Capital
Expenditures
|
$
|
2.3
|
|
$
|
2.4
|
|
|
$
|
7.2
|
|
$
|
7.6
|
|
Debt & Capital
Leases (including current), net of unamortized deferred financing
fees
|
|
|
|
$
|
149.2
|
|
$
|
158.9
|
|
Management Commentary
"We faced another challenging quarter in our continuing
transformation even as we made progress in protecting our print
revenue and built momentum in our new technology initiatives," said
K. "Suri" Suriyakumar, Chairman, President and CEO of ARC Document
Solutions. "While there were smaller declines in print volumes year
over year, the sales mix and higher employee costs weighed on our
margins, as did the effects of the recent hurricanes that swept
through the Southeastern part of the U.S."
"The combination of lower sales and the pressure on our margins
left us no choice but to revise our annual guidance for 2017," said
Mr. Suriyakumar. "As we have stated on numerous occasions, managing
change is never easy, and periods of disruption are part of the
process. We remain encouraged by our efforts and the response from
our markets, and are staying the course as we move through our
transformation."
"We expect our fourth quarter performance to be similar to the
third quarter, which supports our revised guidance," said
Jorge Avalos, Chief Financial
Officer. "Despite the pressures we faced in the period, ARC
continues to generate strong cash flows, as evidenced by the 8%
year-to-date growth, and is benefiting from a capital structure
designed to support us through our transformation."
2017 Third Quarter Supplemental Information:
Net sales were $96.5 million, a
4.0% decrease compared to the third quarter of 2016.
Based on our performance in the third quarter of 2017, and the
adoption of the new simplified goodwill impairment measurement
accounting standard, we recognized a non-cash goodwill impairment
charge of $17.6 million.
There was one less business day in the third quarter of 2017 as
compared to the third quarter of 2016.
Days sales outstanding were 55 in Q3 2017 and Q3 2016.
Architectural, engineering, construction and building
owner/operators (AEC/O) customers comprised approximately 78% of
our total net sales, while customers outside of construction made
up approximately 22% of our total net sales.
Total number of MPS locations at the end of the third quarter
has grown to approximately 10,000, a net gain of approximately 630
locations over Q3 2016.
Adjusted EBITDA excludes loss on extinguishment of debt,
goodwill impairment, restructuring expense and stock-based
compensation expense.
Sales from
Services and Product Lines as a Percentage of Net
Sales
|
|
|
Three Months
Ended
|
Nine Months
Ended
|
|
September
30,
|
September
30,
|
Services and Product
Line
|
2017
|
2016
|
2017
|
2016
|
CDIM
|
52.0
|
%
|
53.0
|
%
|
52.1
|
%
|
52.6
|
%
|
MPS
|
33.3
|
%
|
32.7
|
%
|
32.8
|
%
|
32.5
|
%
|
AIM
|
3.5
|
%
|
3.1
|
%
|
3.3
|
%
|
3.4
|
%
|
Equipment and
supplies sales
|
11.2
|
%
|
11.2
|
%
|
11.8
|
%
|
11.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outlook
ARC Document Solutions revised its annual forecast for 2017,
anticipating fully-diluted annual adjusted earnings per share to be
in the range of $0.12 to $0.15,
as compared to the previous forecast of $0.24 to $0.29; annual cash provided by operating
activities is projected to be in the range of $45 to $49 million as compared to the previous
forecast of $49 to $54 million; and
annual adjusted EBITDA is forecast to be in the range of $52
to $55 million as compared to the
previous forecast of $58 million to $63
million.
Teleconference and Webcast
ARC Document Solutions will hold a conference call with
investors and analysts on Wednesday,
November 1, 2017, at 2 P.M. Pacific
Time (5 P.M. Eastern Time) to
discuss results for the Company's 2017 third quarter. To access the
live audio call, dial 866-564-2842. International callers may join
the conference by dialing +1 323-794-2094. The conference ID number
is 6216256. A live webcast will also be made available on the
investor relations page of ARC Document Solution's website at
http://ir.e-arc.com. A recording of the webcast will be available
for approximately 90 days following the call's conclusion.
About ARC Document Solutions (NYSE: ARC)
ARC Document Solutions distributes Documents and Information to
facilitate communication for design, engineering and construction
professionals, real estate managers and developers, facilities
owners, and a variety of similar disciplines. The Company provides
cloud and mobile solutions, professional services, and hardware to
help its customers around the world reduce costs and increase
efficiency, improve information access and control, and communicate
faster, easier, and better. Follow ARC at 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 and phrases such as "building momentum," "guidance,"
"expect," "believe," "forecast," "outlook," 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, 2016, 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
|
(In thousands,
except per share data)
|
(Unaudited)
|
|
September
30,
|
December
31,
|
Current
assets:
|
2017
|
2016
|
Cash and cash
equivalents
|
$
|
26,363
|
|
$
|
25,239
|
|
Accounts receivable,
net of allowances for accounts receivable of $2,495 and
$2,060
|
59,006
|
|
59,735
|
|
Inventories,
net
|
19,095
|
|
18,184
|
|
Prepaid
expenses
|
5,008
|
|
3,861
|
|
Other current
assets
|
5,034
|
|
4,785
|
|
Total current
assets
|
114,506
|
|
111,804
|
|
Property and
equipment, net of accumulated depreciation of $205,435 and
$201,192
|
65,645
|
|
60,735
|
|
Goodwill
|
121,051
|
|
138,688
|
|
Other intangible
assets, net
|
10,087
|
|
13,202
|
|
Deferred income
taxes
|
41,364
|
|
42,667
|
|
Other
assets
|
2,590
|
|
2,185
|
|
Total
assets
|
$
|
355,243
|
|
$
|
369,281
|
|
Current
liabilities:
|
|
|
Accounts
payable
|
$
|
25,027
|
|
$
|
24,782
|
|
Accrued payroll and
payroll-related expenses
|
10,908
|
|
12,219
|
|
Accrued
expenses
|
15,041
|
|
16,138
|
|
Current portion of
long-term debt and capital leases
|
20,268
|
|
13,773
|
|
Total current
liabilities
|
71,244
|
|
66,912
|
|
Long-term debt and
capital leases
|
128,917
|
|
143,400
|
|
Other long-term
liabilities
|
3,329
|
|
2,148
|
|
Total
liabilities
|
203,490
|
|
212,460
|
|
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; 47,891 and 47,428
shares issued and 46,451 and 45,988 shares
outstanding
|
48
|
|
47
|
|
Additional paid-in capital
|
120,204
|
|
117,749
|
|
Retained
earnings
|
32,681
|
|
41,822
|
|
Accumulated other comprehensive loss
|
(2,545)
|
|
(3,793)
|
|
|
150,388
|
|
155,825
|
|
Less cost of common
stock in treasury, 1,440 shares
|
5,909
|
|
5,909
|
|
Total ARC Document
Solutions, Inc. stockholders' equity
|
144,479
|
|
149,916
|
|
Noncontrolling
interest
|
7,274
|
|
6,905
|
|
Total
equity
|
151,753
|
|
156,821
|
|
Total liabilities and
equity
|
$
|
355,243
|
|
$
|
369,281
|
|
ARC Document
Solutions, Inc.
|
Consolidated
Statements of Operations
|
(In thousands,
except per share data)
|
(Unaudited)
|
Three Months
Ended
|
Nine Months
Ended
|
|
September
30,
|
September
30,
|
|
2017
|
2016
|
2017
|
2016
|
Service
sales
|
$
|
85,625
|
|
$
|
89,178
|
|
$
|
262,459
|
|
$
|
272,394
|
|
Equipment and
supplies sales
|
10,833
|
|
11,265
|
|
35,010
|
|
35,369
|
|
Total net
sales
|
96,458
|
|
100,443
|
|
297,469
|
|
307,763
|
|
Cost of
sales
|
67,231
|
|
67,713
|
|
202,918
|
|
204,904
|
|
Gross
profit
|
29,227
|
|
32,730
|
|
94,551
|
|
102,859
|
|
Selling, general and
administrative expenses
|
25,843
|
|
24,893
|
|
76,540
|
|
76,752
|
|
Amortization of
intangible assets
|
1,053
|
|
1,160
|
|
3,250
|
|
3,705
|
|
Goodwill
impairment
|
17,637
|
|
—
|
|
17,637
|
|
73,920
|
|
Restructuring
expense
|
—
|
|
—
|
|
—
|
|
7
|
|
(Loss) income from
operations
|
(15,306)
|
|
6,677
|
|
(2,876)
|
|
(51,525)
|
|
Other income,
net
|
(19)
|
|
(16)
|
|
(60)
|
|
(54)
|
|
Loss on
extinguishment and modification of debt
|
124
|
|
66
|
|
230
|
|
156
|
|
Interest expense,
net
|
1,530
|
|
1,563
|
|
4,679
|
|
4,535
|
|
(Loss) income before
income tax (benefit) provision
|
(16,941)
|
|
5,064
|
|
(7,725)
|
|
(56,162)
|
|
Income tax (benefit)
provision
|
(2,174)
|
|
2,162
|
|
1,574
|
|
(5,884)
|
|
Net (loss)
income
|
(14,767)
|
|
2,902
|
|
(9,299)
|
|
(50,278)
|
|
Income attributable
to the noncontrolling interest
|
(7)
|
|
(61)
|
|
(55)
|
|
(211)
|
|
Net (loss) income
attributable to ARC Document Solutions, Inc.
shareholders
|
$
|
(14,774)
|
|
$
|
2,841
|
|
$
|
(9,354)
|
|
$
|
(50,489)
|
|
(Loss) earnings per
share attributable to ARC Document Solutions, Inc.
shareholders:
|
|
|
|
|
Basic
|
$
|
(0.32)
|
|
$
|
0.06
|
|
$
|
(0.20)
|
|
$
|
(1.10)
|
|
Diluted
|
$
|
(0.32)
|
|
$
|
0.06
|
|
$
|
(0.20)
|
|
$
|
(1.10)
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
Basic
|
45,834
|
|
45,599
|
|
45,756
|
|
46,055
|
|
Diluted
|
45,834
|
|
46,189
|
|
45,756
|
|
46,055
|
|
ARC Document
Solutions, Inc.
Non-GAAP Measures
Reconciliation of cash flows provided by operating activities to
EBITDA and Adjusted EBITDA
(In thousands)
(Unaudited)
|
|
Three Months
Ended
|
Nine Months
Ended
|
|
September
30,
|
September
30,
|
|
2017
|
2016
|
2017
|
2016
|
Cash flows provided
by operating activities
|
$
|
11,326
|
|
$
|
12,163
|
|
$
|
36,756
|
|
$
|
34,046
|
|
Changes in operating
assets and liabilities, net of effect of business
acquisitions
|
(959)
|
|
1,958
|
|
1,406
|
|
9,976
|
|
Non-cash expenses,
including depreciation, amortization and goodwill
impairment
|
(25,134)
|
|
(11,219)
|
|
(47,461)
|
|
(94,300)
|
|
Income tax (benefit)
provision
|
(2,174)
|
|
2,162
|
|
1,574
|
|
(5,884)
|
|
Interest expense,
net
|
1,530
|
|
1,563
|
|
4,679
|
|
4,535
|
|
Income attributable
to the noncontrolling interest
|
(7)
|
|
(61)
|
|
(55)
|
|
(211)
|
|
Depreciation and
amortization
|
8,430
|
|
7,857
|
|
25,037
|
|
23,737
|
|
EBITDA
|
(6,988)
|
|
14,423
|
|
21,936
|
|
(28,101)
|
|
Loss on
extinguishment and modification of debt
|
124
|
|
66
|
|
230
|
|
156
|
|
Goodwill
impairment
|
17,637
|
|
—
|
|
17,637
|
|
73,920
|
|
Restructuring
expense
|
—
|
|
—
|
|
—
|
|
7
|
|
Stock-based
compensation
|
699
|
|
650
|
|
2,251
|
|
2,073
|
|
Adjusted
EBITDA
|
$
|
11,472
|
|
$
|
15,139
|
|
$
|
42,054
|
|
$
|
48,055
|
|
|
See Non-GAAP
Financial Measures discussion below.
|
ARC Document Solutions, Inc.
Non-GAAP Measures
Reconciliation of net (loss) income attributable to ARC Document
Solutions, Inc. to EBITDA and Adjusted EBITDA
(In thousands)
(Unaudited)
|
|
Three Months
Ended
|
Nine Months
Ended
|
|
September
30,
|
September
30,
|
|
2017
|
2016
|
2017
|
2016
|
Net (loss) income
attributable to ARC Document Solutions, Inc.
|
$
|
(14,774)
|
|
$
|
2,841
|
|
$
|
(9,354)
|
|
$
|
(50,489)
|
|
Interest expense,
net
|
1,530
|
|
1,563
|
|
4,679
|
|
4,535
|
|
Income tax (benefit)
provision
|
(2,174)
|
|
2,162
|
|
1,574
|
|
(5,884)
|
|
Depreciation and
amortization
|
8,430
|
|
7,857
|
|
25,037
|
|
23,737
|
|
EBITDA
|
(6,988)
|
|
14,423
|
|
21,936
|
|
(28,101)
|
|
Loss on
extinguishment and modification of debt
|
124
|
|
66
|
|
230
|
|
156
|
|
Goodwill
impairment
|
17,637
|
|
—
|
|
17,637
|
|
73,920
|
|
Restructuring
expense
|
—
|
|
—
|
|
—
|
|
7
|
|
Stock-based
compensation
|
699
|
|
650
|
|
2,251
|
|
2,073
|
|
Adjusted
EBITDA
|
$
|
11,472
|
|
$
|
15,139
|
|
$
|
42,054
|
|
$
|
48,055
|
|
|
See Non-GAAP
Financial Measures discussion below.
|
ARC Document
Solutions, Inc.
Non-GAAP Measures
Reconciliation of net (loss) income attributable to ARC to
unaudited adjusted net income attributable to ARC
(In thousands, except per share data)
(Unaudited)
|
|
Three Months
Ended
|
Nine Months
Ended
|
|
September
30,
|
September
30,
|
|
2017
|
2016
|
2017
|
2016
|
Net (loss) income
attributable to ARC Document Solutions, Inc.
|
$
|
(14,774)
|
|
$
|
2,841
|
|
$
|
(9,354)
|
|
$
|
(50,489)
|
|
Loss on
extinguishment and modification of debt
|
124
|
|
66
|
|
230
|
|
156
|
|
Goodwill
impairment
|
17,637
|
|
—
|
|
17,637
|
|
73,920
|
|
Restructuring
expense
|
—
|
|
—
|
|
—
|
|
7
|
|
Income tax benefit
related to above items
|
(3,144)
|
|
(26)
|
|
(3,186)
|
|
(13,395)
|
|
Deferred tax
valuation allowance and other discrete tax items
|
515
|
|
138
|
|
594
|
|
341
|
|
Unaudited adjusted
net income attributable to ARC Document Solutions, Inc.
|
$
|
358
|
|
$
|
3,019
|
|
$
|
5,921
|
|
$
|
10,540
|
|
|
|
|
|
|
Actual:
|
|
|
|
|
(Loss) earnings per
share attributable to ARC Document Solutions, Inc.
shareholders:
|
|
|
|
|
Basic
|
$
|
(0.32)
|
|
$
|
0.06
|
|
$
|
(0.20)
|
|
$
|
(1.10)
|
|
Diluted
|
$
|
(0.32)
|
|
$
|
0.06
|
|
$
|
(0.20)
|
|
$
|
(1.10)
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
Basic
|
45,834
|
|
45,599
|
|
45,756
|
|
46,055
|
|
Diluted
|
45,834
|
|
46,189
|
|
45,756
|
|
46,055
|
|
|
|
|
|
|
Adjusted:
|
|
|
|
|
Earnings per
share attributable to ARC Document Solutions, Inc.
shareholders:
|
|
|
|
|
Basic
|
$
|
0.01
|
|
$
|
0.07
|
|
$
|
0.13
|
|
$
|
0.23
|
|
Diluted
|
$
|
0.01
|
|
$
|
0.07
|
|
$
|
0.13
|
|
$
|
0.23
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
Basic
|
45,834
|
|
45,599
|
|
45,756
|
|
46,055
|
|
Diluted
|
46,342
|
|
46,189
|
|
46,335
|
|
46,655
|
|
|
See Non-GAAP
Financial Measures discussion below.
|
ARC Document
Solutions, Inc.
Net Sales by Product Line
(In thousands)
(Unaudited)
|
|
Three Months
Ended
|
Nine Months
Ended
|
|
September
30,
|
September
30,
|
|
2017
|
2016
|
2017
|
2016
|
Service
sales
|
|
|
|
|
CDIM
|
$
|
50,089
|
|
$
|
53,228
|
|
$
|
155,031
|
|
$
|
161,753
|
|
MPS
|
32,153
|
|
32,796
|
|
97,697
|
|
100,082
|
|
AIM
|
3,383
|
|
3,154
|
|
9,731
|
|
10,559
|
|
Total service
sales
|
85,625
|
|
89,178
|
|
262,459
|
|
272,394
|
|
Equipment and
supplies sales
|
10,833
|
|
11,265
|
|
35,010
|
|
35,369
|
|
Total net
sales
|
$
|
96,458
|
|
$
|
100,443
|
|
$
|
297,469
|
|
$
|
307,763
|
|
Non-GAAP Financial Measures
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.
EBITDA represents net income before interest, taxes,
depreciation and amortization.
We have presented 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 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. We use EBITDA to compare the performance of our operating
segments and to measure performance for determining
consolidated-level compensation. In addition, we use EBITDA to
evaluate potential acquisitions and potential capital
expenditures.
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, 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 EBITDA and related ratios only as
supplements.
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 attributable
to ARC and adjusted earnings per share attributable to ARC
shareholders for the three and nine months ended September 30,
2017 and 2016 to reflect the exclusion of loss on extinguishment
and modification of debt, goodwill impairment, restructuring
expense, 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, 2017 and 2016.
We believe these charges were the result of our capital
restructuring, or other items which are not indicative of our
actual operating performance.
We have presented adjusted EBITDA for the three and nine months
ended September 30, 2017 and 2016 to exclude loss on
extinguishment and modification of debt, goodwill impairment,
restructuring expense and stock-based compensation expense. The
adjustment of EBITDA for these items 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, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
|
Three Months
Ended
|
Nine Months
Ended
|
|
September
30,
|
September
30,
|
|
2017
|
2016
|
2017
|
2016
|
Cash flows from
operating activities
|
|
|
|
|
Net (loss)
income
|
$
|
(14,767)
|
|
$
|
2,902
|
|
$
|
(9,299)
|
|
$
|
(50,278)
|
|
Adjustments to
reconcile net (loss) income to net cash provided by operating
activities:
|
|
|
|
|
Allowance for
accounts receivable
|
306
|
|
324
|
|
867
|
|
644
|
|
Depreciation
|
7,377
|
|
6,697
|
|
21,787
|
|
20,032
|
|
Amortization of
intangible assets
|
1,053
|
|
1,160
|
|
3,250
|
|
3,705
|
|
Amortization of
deferred financing costs
|
69
|
|
111
|
|
246
|
|
344
|
|
Goodwill
impairment
|
17,637
|
|
—
|
|
17,637
|
|
73,920
|
|
Stock-based
compensation
|
699
|
|
650
|
|
2,251
|
|
2,073
|
|
Deferred income
taxes
|
(2,380)
|
|
2,299
|
|
1,045
|
|
(6,018)
|
|
Deferred tax
valuation allowance
|
454
|
|
(1)
|
|
488
|
|
(16)
|
|
Loss on
extinguishment and modification of debt
|
124
|
|
66
|
|
230
|
|
156
|
|
Other non-cash items,
net
|
(205)
|
|
(87)
|
|
(340)
|
|
(540)
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Accounts
receivable
|
554
|
|
(897)
|
|
406
|
|
(2,285)
|
|
Inventory
|
(142)
|
|
(429)
|
|
(650)
|
|
(3,196)
|
|
Prepaid expenses and
other assets
|
1,029
|
|
1,179
|
|
(1,129)
|
|
513
|
|
Accounts payable and
accrued expenses
|
(482)
|
|
(1,811)
|
|
(33)
|
|
(5,008)
|
|
Net cash provided by
operating activities
|
11,326
|
|
12,163
|
|
36,756
|
|
34,046
|
|
Cash flows from
investing activities
|
|
|
|
|
Capital
expenditures
|
(2,335)
|
|
(2,430)
|
|
(7,246)
|
|
(7,580)
|
|
Other
|
72
|
|
135
|
|
466
|
|
842
|
|
Net cash used in
investing activities
|
(2,263)
|
|
(2,295)
|
|
(6,780)
|
|
(6,738)
|
|
Cash flows from
financing activities
|
|
|
|
|
Proceeds from stock
option exercises
|
2
|
|
46
|
|
73
|
|
76
|
|
Proceeds from
issuance of common stock under Employee Stock Purchase
Plan
|
37
|
|
26
|
|
103
|
|
96
|
|
Share
repurchases
|
—
|
|
(200)
|
|
—
|
|
(5,297)
|
|
Contingent
consideration on prior acquisitions
|
(63)
|
|
(86)
|
|
(214)
|
|
(453)
|
|
Early extinguishment
of long-term debt
|
—
|
|
(7,000)
|
|
(14,150)
|
|
(16,000)
|
|
Payments on long-term
debt agreements and capital leases
|
(52,146)
|
|
(3,310)
|
|
(60,060)
|
|
(9,651)
|
|
Borrowings under
revolving credit facilities
|
52,350
|
|
—
|
|
54,850
|
|
—
|
|
Payments under
revolving credit facilities
|
(9,375)
|
|
—
|
|
(9,675)
|
|
—
|
|
Payment of deferred
financing costs
|
(270)
|
|
(76)
|
|
(270)
|
|
(106)
|
|
Net cash used in
financing activities
|
(9,465)
|
|
(10,600)
|
|
(29,343)
|
|
(31,335)
|
|
Effect of foreign
currency translation on cash balances
|
161
|
|
(80)
|
|
491
|
|
(296)
|
|
Net change in cash
and cash equivalents
|
(241)
|
|
(812)
|
|
1,124
|
|
(4,323)
|
|
Cash and cash
equivalents at beginning of period
|
26,604
|
|
20,452
|
|
25,239
|
|
23,963
|
|
Cash and cash
equivalents at end of period
|
$
|
26,363
|
|
$
|
19,640
|
|
$
|
26,363
|
|
$
|
19,640
|
|
Supplemental
disclosure of cash flow information
|
|
|
|
|
Noncash investing
and financing activities
|
|
|
|
|
Capital lease
obligations incurred
|
$
|
6,404
|
|
$
|
3,738
|
|
$
|
20,714
|
|
$
|
12,345
|
|
Contingent
liabilities in connection with acquisition of businesses
|
$
|
—
|
|
$
|
—
|
|
$
|
27
|
|
$
|
85
|
|
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SOURCE ARC Document Solutions, Inc.