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,

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