ARC Document Solutions, Inc.

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

Three Months Ended

Twelve Months Ended

December 31,

December 31,

2016

2015

2016

2015

Service sales

$

85,947

$

91,593

$

358,341

$

378,638

Equipment and supplies sales

12,611

12,946

47,980

50,027

Total net sales

98,558

104,539

406,321

428,665

Cost of sales

68,174

69,238

273,078

280,541

Gross profit

30,384

35,301

133,243

148,124

Selling, general and administrative expenses

23,462

26,877

100,214

107,280

Amortization of intangible assets

1,128

1,336

4,833

5,642

Goodwill impairment

—

—

73,920

—

Restructuring expense

—

—

7

89

Income from operations

5,794

7,088

(45,731)

35,113

Other income, net

(18)

(18)

(72)

(99)

Loss on extinguishment of debt

52

89

208

282

Interest expense, net

1,461

1,499

5,996

6,974

Income (loss) before income tax provision (benefit)

4,299

5,518

(51,863)

27,956

Income tax provision (benefit)

1,520

2,334

(4,364)

(69,432)

Net income (loss)

2,779

3,184

(47,499)

97,388

Income attributable to noncontrolling interest

(155)

(123)

(366)

(348)

Net income (loss) attributable to ARC Document Solutions, Inc. shareholders

$

2,624

$

3,061

$

(47,865)

$

97,040

Earnings (loss) per share attributable to ARC Document Solutions, Inc. shareholders:

Basic

$

0.06

$

0.07

$

(1.04)

$

2.08

Diluted

$

0.06

$

0.06

$

(1.04)

$

2.04

Weighted average common shares outstanding:

Basic

45,567

46,722

45,932

46,631

Diluted

46,274

47,400

45,932

47,532