ARC DOCUMENT SOLUTIONS, INC.

CIK:0001305168|SEC Filings

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Income Statement [Abstract]
Net sales	$ 74,448	$ 71,057	$ 220,354	$ 212,325
Cost of sales	49,689	46,908	146,400	140,075
Gross profit	24,759	24,149	73,954	72,250
Selling, general and administrative expenses	23,268	19,269	63,681	57,764
Amortization of intangible assets	9	10	29	31
Income from operations	1,482	4,870	10,244	14,455
Other income, net	(23)	(16)	(94)	(42)
Interest expense, net	327	397	968	1,300
Income before income tax provision	1,178	4,489	9,370	13,197
Income tax provision	1,279	1,368	3,972	4,262
Net (loss) income	(101)	3,121	5,398	8,935
Loss attributable to the noncontrolling interest	36	44	149	188
Net (loss) income attributable to ARC Document Solutions, Inc. stockholders	$ (65)	$ 3,165	$ 5,547	$ 9,123
Earnings per share attributable to ARC Document Solutions, Inc. stockholders
Basic (in usd per share)		$ 0.07	$ 0.13	$ 0.21
Diluted (in usd per share)		$ 0.07	$ 0.13	$ 0.21
Weighted average common shares outstanding:
Basic (in shares)	42,529	42,554	42,355	42,634
Diluted (in shares)	43,440	43,516	43,192	43,624

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Cash flows from operating activities
Net income	$ 5,398	$ 8,935
Adjustments to reconcile net income to net cash provided by operating activities:
Allowance for credit losses	135	285
Depreciation	12,026	13,503
Amortization of intangible assets	29	31
Amortization of deferred financing costs	52	50
Stock-based compensation	1,935	1,622
Deferred income taxes	3,256	3,646
Deferred tax valuation allowance	(107)	160
Other non-cash items, net	(394)	(347)
Changes in operating assets and liabilities:
Accounts receivable	(6,151)	(1,968)
Inventory	(368)	(135)
Prepaid expenses and other assets	6,249	6,489
Accounts payable and accrued expenses	(2,851)	(9,414)
Net cash provided by operating activities	19,209	22,857
Cash flows from investing activities
Capital expenditures	(10,933)	(7,728)
Other	477	267
Net cash used in investing activities	(10,456)	(7,461)
Cash flows from financing activities
Proceeds from stock option exercises	40	1,130
Proceeds from issuance of common stock under Employee Stock Purchase Plan	82	98
Share repurchases	(337)	(2,849)
Payments on finance leases	(7,055)	(9,163)
Borrowings under revolving credit facilities	120,000	122,000
Payments under revolving credit facilities	(120,000)	(122,000)
Payment of deferred financing costs	0	(23)
Dividends paid	(6,346)	(6,399)
Net cash used in financing activities	(13,616)	(17,206)
Effect of foreign currency translation on cash balances	61	(165)
Net change in cash and cash equivalents	(4,802)	(1,975)
Cash and cash equivalents at beginning of period	56,093	52,561
Cash and cash equivalents at end of period	51,291	50,586
Noncash investing and financing activities
Finance lease obligations incurred	3,935	5,145
Operating lease obligations incurred	$ 8,187	$ 7,070

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Current assets:
Cash and cash equivalents	$ 51,291	$ 56,093
Accounts receivable, net of allowances for accounts receivable of $1,640 and $1,857	41,896	35,775
Inventory	9,202	8,818
Prepaid expenses	4,828	3,988
Other current assets	4,310	3,978
Total current assets	111,527	108,652
Property and equipment, net of accumulated depreciation of $226,164 and $229,122	43,668	40,925
Right-of-use assets from operating leases	33,670	32,838
Goodwill	121,051	121,051
Other intangible assets, net	134	162
Deferred income taxes	1,450	4,383
Other assets	1,955	2,113
Total assets	313,455	310,124
Current liabilities:
Accounts payable	25,639	24,175
Accrued payroll and payroll-related expenses	10,572	9,401
Accrued expenses	20,860	18,787
Current operating lease liability	10,655	9,924
Current portion of finance leases	6,976	8,870
Total current liabilities	74,702	71,157
Long-term operating lease liabilities	27,367	27,357
Long-term debt and finance leases	52,172	53,366
Deferred income taxes	236	52
Other long-term liabilities	2,431	2,467
Total liabilities	156,908	154,399
Commitments and contingencies (Note 6)
ARC Document Solutions, Inc. stockholders’ equity:
Preferred stock, $0.001 par value, 25,000 shares authorized; 0 shares issued and outstanding	0	0
Common stock, $0.001 par value, 150,000 shares authorized; 53,125 and 52,526 shares issued and 43,262 and 42,783 shares outstanding	53	52
Additional paid-in capital	138,516	136,460
Retained earnings	43,327	44,144
Accumulated other comprehensive loss	(4,135)	(4,200)
Total stockholders equity before adjustment of treasury stock	177,761	176,456
Less cost of common stock in treasury, 9,863 and 9,743 shares	22,727	22,390
Total ARC Document Solutions, Inc. stockholders’ equity	155,034	154,066
Noncontrolling interest	1,513	1,659
Total equity	156,547	155,725
Total liabilities and equity	$ 313,455	$ 310,124