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