ARC Document Solutions Reports Results for Second Quarter 2016
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ARC Document Solutions Reports Results for Second Quarter 2016

WALNUT CREEK, CA -- (Marketwired) -- Aug 02, 2016 -- 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 second quarter ended June 30, 2016.

2016 Second Quarter Business Highlights:

                                                                            
Financial Highlights:                                                       
                                                                            
                                     Three Months Ended   Six Months Ended  
                                          June 30,            June 30,      
                                     ------------------  ------------------ 
(All dollar amounts in millions,                                            
 except EPS)                           2016      2015      2016      2015   
                                     --------  --------  --------  -------- 
Net Sales                            $  103.8  $  113.4  $  207.3  $  217.7 
Gross Margin                             35.1%     36.0%     33.8%     35.3%
Net (loss) income attributable to                                           
 ARC                                 $  (55.9) $    9.3  $  (53.3) $   13.7 
Adjusted Net Income attributable to                                         
 ARC                                 $    4.8  $    6.2  $    7.5  $    9.4 
(Loss) earnings per share - Diluted  $  (1.22) $   0.19  $  (1.15) $   0.29 
Adjusted earnings per share -                                               
 Diluted                             $   0.10  $   0.13  $   0.16  $   0.20 
Adjusted EBITDA                      $   18.1  $   21.6  $   32.9  $   38.4 
Cash provided by operating                                                  
 activities                          $   16.6  $   16.9  $   21.9  $   22.2 
Capital Expenditures                 $    2.6  $    4.1  $    5.2  $    7.6 
Debt & Capital Leases (including                                            
 current), net of unamortized                                               
 deferred financing fees                                 $  164.9  $  187.0 
                                                                            

Management Commentary

"Despite continuing drops in our traditional business, our new services continue to grow, led by year-over-year growth of nine percent in archiving and information management," said K. "Suri" Suriyakumar, Chairman, President and CEO of ARC Document Solutions. "While our technology services have yet to offset declines related to printing services, our cash position remains strong as evidenced by our continuing ability to repurchase our shares and reduce our senior debt. Our capital structure is excellent, and we are confident in our ability to keep the company stable and productive during this transition."

"The type of transition ARC is going through is a tough one. The result is that we are changing at every level -- sales, operations, technology, and finance -- to balance the future needs of the market against what customers need today," Mr. Suriyakumar continued. "This is especially true given that the construction industry is slow in adopting technology. It is why I have emphasized in my previous discussions that we require 24 to 36 months to get on top of this transition."

"The company remains on sound financial footing while we work our way through the difficult sales comparison to last year," said Jorge Avalos, Chief Financial Officer of ARC Document Solutions. "Cash flow from operations is on par with last year's performance, the leverage ratio on our senior debt is below 2.5 times, and we continue to repurchase shares, all of which demonstrates our continuing focus on cash generation, debt pay-down, and returning value to our shareholders."

2016 Second Quarter Supplemental Information:

Net sales were $103.8 million, an 8.5% decrease compared to the second quarter of 2015.

Days sales outstanding in Q2 2016 were 53, compared to 54 days in Q2 2015.

Architectural, engineering, construction and building owner/operators (AEC/O) customers comprised approximately 77% of our total net sales, while customers outside of construction made up approximately 23% of our total net sales.

Total number of MPS locations at the end of the second quarter has grown to approximately 9,240, a gain of 520 locations over Q2 2015. This information reflects the reduction of approximately 200 locations associated with a large client that did not renew their MPS engagement with us at the end of 2015.

Adjusted EBITDA excludes loss on extinguishment of debt, goodwill impairment, the impact of trade secret litigation costs, stock-based compensation expense, and restructuring expense.

                                                                            
Sales from Services and Product Lines as a Percentage of Net Sales          
                                                                            
                                     Three Months Ended   Six Months Ended  
                                          June 30,            June 30,      
                                     ------------------  ------------------ 
Services and Product Line              2016      2015      2016      2015   
                                     --------  --------  --------  -------- 
CDIM                                     52.9%     51.9%     52.3%     52.2%
MPS                                      32.8%     32.7%     32.5%     33.5%
AIM                                       3.5%      3.0%      3.6%      2.8%
Equipment and supplies sales             10.8%     12.4%     11.6%     11.5%
                                                                            

Outlook

ARC Document Solutions has revised is 2016 annual forecast and now anticipates annual adjusted earnings per share in 2016 to be in the range of $0.24 to $0.28 on a fully diluted basis, as compared to $0.30 to $0.35 previously. Annual cash flow from operations is now projected to be in the range of $48 million to $52 million, as compared to $55 million to $60 million previously. The Company's outlook for 2016 annual adjusted EBITDA is now expected to be in the range of $59 million to $63 million, as compared to $66 to $71 million previously.

Teleconference and Webcast

To access the live audio call, dial 888-329-8877. International callers may join the conference by dialing 719-457-2645. The conference ID number is 5777429. A live webcast will also be made available on the investor relations page of ARC Document Solution's website at ir.e-arc.com.

The webcast of the call will be available at www.e-arc.com for approximately 90 days following the call's conclusion. A telephone replay of the call also will be available for five days after the call's conclusion. To access the replay, please copy and paste the following URL into your browser http://bit.ly/29mPy39. The conference ID number is 5777429.

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 such as "anticipates," "forecast," "project," "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, 2015, 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)                                                                 
                                                   June 30,    December 31, 
Current assets:                                      2016          2015     
                                                 ------------  ------------ 
  Cash and cash equivalents                      $     20,452  $     23,963 
  Accounts receivable, net of allowances for                                
   accounts receivable of $1,850 and $2,094            60,933        60,085 
  Inventories, net                                     19,570        16,972 
  Prepaid expenses                                      4,766         4,555 
  Other current assets                                  4,347         4,131 
                                                 ------------  ------------ 
    Total current assets                              110,068       109,706 
Property and equipment, net of accumulated                                  
 depreciation of $206,584 and $202,457                 57,754        57,590 
Goodwill                                              138,688       212,608 
Other intangible assets, net                           15,580        17,946 
Deferred income taxes                                  76,019        74,196 
Other assets                                            2,372         2,492 
                                                 ------------  ------------ 
    Total assets                                 $    400,481  $    474,538 
                                                 ============  ============ 
Current liabilities:                                                        
  Accounts payable                               $     22,148  $     23,989 
  Accrued payroll and payroll-related expenses         11,811        12,118 
  Accrued expenses                                     18,023        19,194 
  Current portion of long-term debt and capital                             
   leases                                              14,863        14,374 
                                                 ------------  ------------ 
    Total current liabilities                          66,845        69,675 
Long-term debt and capital leases                     150,059       157,018 
Deferred income taxes                                  29,412        35,933 
Other long-term liabilities                             2,623         2,778 
                                                 ------------  ------------ 
    Total liabilities                                 248,939       265,404 
                                                 ------------  ------------ 
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; 47,390 and 47,130 shares issued                              
   and 46,008 and 47,029 shares outstanding                47            47 
  Additional paid-in capital                          116,494       115,089 
  Retained earnings                                    36,357        89,687 
  Accumulated other comprehensive loss                 (2,653)       (2,097)
                                                 ------------  ------------ 
                                                      150,245       202,726 
  Less cost of common stock in treasury, 1,382                              
   and 101 shares                                       5,709           612 
                                                 ------------  ------------ 
    Total ARC Document Solutions, Inc.                                      
     stockholders' equity                             144,536       202,114 
Noncontrolling interest                                 7,006         7,020 
                                                 ------------  ------------ 
    Total equity                                      151,542       209,134 
                                                 ------------  ------------ 
    Total liabilities and equity                 $    400,481  $    474,538 
                                                 ============  ============ 
                                                                            
                                                                            
                                                                            
ARC Document Solutions, Inc.                                                
Consolidated Statements of Operations                                       
(In thousands, except per share data)                                       
(Unaudited)                                                                 
                                   Three Months Ended    Six Months Ended   
                                        June 30,             June 30,       
                                   ------------------  -------------------- 
                                     2016      2015       2016       2015   
                                   --------  --------  ---------  --------- 
Service sales                      $ 92,581  $ 99,336  $ 183,216  $ 192,661 
Equipment and supplies sales         11,189    14,053     24,104     25,047 
                                   --------  --------  ---------  --------- 
  Total net sales                   103,770   113,389    207,320    217,708 
Cost of sales                        67,378    72,530    137,191    140,828 
                                   --------  --------  ---------  --------- 
  Gross profit                       36,392    40,859     70,129     76,880 
Selling, general and                                                        
 administrative expenses             25,503    27,132     51,859     54,587 
Amortization of intangible assets     1,232     1,442      2,545      2,931 
Goodwill impairment                  73,920        --     73,920         -- 
Restructuring expense                     5        11          7         85 
                                   --------  --------  ---------  --------- 
  (Loss) income from operations     (64,268)   12,274    (58,202)    19,277 
Other income, net                       (15)      (30)       (38)       (56)
Loss on extinguishment of debt           44        97         90         97 
Interest expense, net                 1,526     1,939      2,972      3,796 
                                   --------  --------  ---------  --------- 
  (Loss) income before income tax                                           
   (benefit) provision              (65,823)   10,268    (61,226)    15,440 
Income tax (benefit) provision      (10,015)      811     (8,046)     1,572 
                                   --------  --------  ---------  --------- 
  Net (loss) income                 (55,808)    9,457    (53,180)    13,868 
Income attributable to the                                                  
 noncontrolling interest                (96)     (200)      (150)      (175)
                                   --------  --------  ---------  --------- 
  Net (loss) income attributable                                            
   to ARC Document Solutions, Inc.                                          
   shareholders                    $(55,904) $  9,257  $ (53,330) $  13,693 
                                   ========  ========  =========  ========= 
(Loss) earnings per share                                                   
 attributable to ARC Document                                               
 Solutions, Inc. shareholders:                                              
  Basic                            $  (1.22) $   0.20  $   (1.15) $    0.29 
                                   ========  ========  =========  ========= 
  Diluted                          $  (1.22) $   0.19  $   (1.15) $    0.29 
                                   ========  ========  =========  ========= 
Weighted average common shares                                              
 outstanding:                                                               
  Basic                              45,955    46,611     46,285     46,528 
  Diluted                            45,955    47,558     46,285     47,634 
                                                                            
                                                                            
                                                                            
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   Six Months Ended  
                                          June 30,            June 30,      
                                     ------------------  ------------------ 
                                       2016      2015      2016      2015   
                                     --------  --------  --------  -------- 
Cash flows provided by operating                                            
 activities                          $ 16,580  $ 16,864  $ 21,883  $ 22,152 
  Changes in operating assets and                                           
   liabilities, net of effect of                                            
   business acquisitions                  209     2,928     8,018    12,344 
  Non-cash expenses, including                                              
   depreciation, amortization and                                           
   goodwill impairment                (72,597)  (10,335)  (83,081)  (20,628)
  Income tax (benefit) provision      (10,015)      811    (8,046)    1,572 
  Interest expense, net                 1,526     1,939     2,972     3,796 
  Income attributable to the                                                
   noncontrolling interest                (96)     (200)     (150)     (175)
  Depreciation and amortization         7,890     8,520    15,880    17,075 
                                     --------  --------  --------  -------- 
EBITDA                                (56,503)   20,527   (42,524)   36,136 
  Loss on extinguishment of debt           44        97        90        97 
  Goodwill impairment                  73,920        --    73,920        -- 
  Trade secret litigation costs(1)         --        --        --        34 
  Restructuring expense(2)                  5        11         7        85 
  Stock-based compensation                651       921     1,423     2,004 
                                     --------  --------  --------  -------- 
Adjusted EBITDA                      $ 18,117  $ 21,556  $ 32,916  $ 38,356 
                                     ========  ========  ========  ======== 
                                                                            

(1) On February 1, 2013, we filed a civil complaint against a competitor and a former employee in the Superior Court of California for Orange County, which alleged, among other claims, the misappropriation of ARC trade secrets; namely, proprietary customer lists that were used to communicate with ARC customers in an attempt to unfairly acquire their business. In prior litigation with the competitor based on related facts, in 2007 the competitor entered into a settlement agreement and stipulated judgment, which included an injunction. We instituted this suit to stop the defendant from using similar unfair business practices against us in the Southern California market. The case proceeded to trial in May 2014, and a jury verdict was entered for the defendants. In the first quarter of 2015, we entered into a settlement and paid the defendant. Legal fees associated with the litigation were recorded as selling, general and administrative expense.

(2) In October 2012, we initiated a restructuring plan which included the closure or downsizing of the Company's service center locations, as well as a reduction in headcount. Restructuring expenses in 2016 and 2015 primarily consist of revised estimated lease termination and obligation costs resulting from facilities closed in 2013.

                                                                            
                                                                            
                                                                            
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     Six Months Ended   
                                       June 30,              June 30,       
                                 --------------------  -------------------- 
                                    2016       2015       2016       2015   
                                 ---------  ---------  ---------  --------- 
Net (loss) income attributable                                              
 to ARC Document Solutions, Inc. $ (55,904) $   9,257  $ (53,330) $  13,693 
  Loss on extinguishment of debt        44         97         90         97 
  Goodwill impairment               73,920         --     73,920         -- 
  Restructuring expense                  5         11          7         85 
  Trade secret litigation costs         --         --         --         34 
  Income tax benefit related to                                             
   above items                     (13,350)       (42)   (13,369)       (84)
  Deferred tax valuation                                                    
   allowance and other discrete                                             
   tax items                            95     (3,151)       203     (4,407)
                                 ---------  ---------  ---------  --------- 
Unaudited adjusted net income                                               
 attributable to ARC Document                                               
 Solutions, Inc.                 $   4,810  $   6,172  $   7,521  $   9,418 
                                 =========  =========  =========  ========= 
                                                                            
Actual:                                                                     
(Loss) earnings per share                                                   
 attributable to ARC Document                                               
 Solutions, Inc. shareholders:                                              
  Basic                          $   (1.22) $    0.20  $   (1.15) $    0.29 
                                 =========  =========  =========  ========= 
  Diluted                        $   (1.22) $    0.19  $   (1.15) $    0.29 
                                 =========  =========  =========  ========= 
Weighted average common shares                                              
 outstanding:                                                               
  Basic                             45,955     46,611     46,285     46,528 
  Diluted                           45,955     47,558     46,285     47,634 
                                                                            
Adjusted:                                                                   
Earnings per share attributable                                             
 to ARC Document Solutions, Inc.                                            
 shareholders:                                                              
  Basic                          $    0.10  $    0.13  $    0.16  $    0.20 
                                 =========  =========  =========  ========= 
  Diluted                        $    0.10  $    0.13  $    0.16  $    0.20 
                                 =========  =========  =========  ========= 
Weighted average common shares                                              
 outstanding:                                                               
  Basic                             45,955     46,611     46,285     46,528 
  Diluted                           46,568     47,558     46,889     47,634 
                                                                            
                                                                            
                                                                            
                                                                            
ARC Document Solutions, Inc.                                                
Non-GAAP Measures                                                           
Reconciliation of net (loss) income attributable to ARC Document Solutions, 
 Inc. shareholders to EBITDA and Adjusted EBITDA                            
(In thousands)                                                              
(Unaudited)                                                                 
                                                                            
                                   Three Months Ended     Six Months Ended  
                                        June 30,              June 30,      
                                 --------------------- ---------------------
                                    2016       2015       2016       2015   
                                 ---------  ---------- ---------  ----------
Net (loss) income attributable                                              
 to ARC Document Solutions, Inc.                                            
 shareholders                    $ (55,904) $    9,257 $ (53,330) $   13,693
  Interest expense, net              1,526       1,939     2,972       3,796
  Income tax (benefit) provision   (10,015)        811    (8,046)      1,572
  Depreciation and amortization      7,890       8,520    15,880      17,075
                                 ---------  ---------- ---------  ----------
EBITDA                             (56,503)     20,527   (42,524)     36,136
  Loss on extinguishment of debt        44          97        90          97
  Goodwill impairment               73,920          --    73,920          --
  Trade secret litigation costs         --          --        --          34
  Restructuring expense                  5          11         7          85
  Stock-based compensation             651         921     1,423       2,004
                                 ---------  ---------- ---------  ----------
Adjusted EBITDA                  $  18,117  $   21,556 $  32,916  $   38,356
                                 =========  ========== =========  ==========
                                                                            
                                                                            
                                                                            
ARC Document Solutions, Inc.                                                
Net Sales by Product Line                                                   
(In thousands)                                                              
(Unaudited)                                                                 
                                                                            
                                   Three Months Ended     Six Months Ended  
                                        June 30,              June 30,      
                                 --------------------- ---------------------
                                    2016       2015       2016       2015   
                                 ---------- ---------- ---------- ----------
Service sales                                                               
CDIM                             $   54,860 $   58,835    108,525    113,477
MPS                                  34,055     37,134     67,286     73,011
AIM                                   3,666      3,367      7,405      6,173
                                 ---------- ---------- ---------- ----------
    Total service sales              92,581     99,336    183,216    192,661
Equipment and supplies sales         11,189     14,053     24,104     25,047
                                 ---------- ---------- ---------- ----------
    Total net sales              $  103,770 $  113,389 $  207,320 $  217,708
                                 ========== ========== ========== ==========
                                                                            
                                                                            

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. EBITDA margin is a non-GAAP measure calculated by dividing EBITDA by net sales.

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:

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 six months ended June 30, 2016 and 2015 to reflect the exclusion of loss on extinguishment of debt, goodwill impairment, restructuring expense, trade secret litigation costs, 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 six months ended June 30, 2016 and 2015. We believe these charges were the result of the then current macroeconomic environment, our capital restructuring, or other items which are not indicative of our actual operating performance.

We have presented adjusted EBITDA in the three and six months ended June 30, 2016 and 2015 to exclude loss on extinguishment of debt, goodwill impairment, trade secret litigation costs, 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                                                      
Consolidated Statements of Cash Flows                                       
(In thousands)                                                              
(Unaudited)                                                                 
                                                                            
                                  Three Months Ended     Six Months Ended   
                                       June 30,              June 30,       
                                 --------------------  -------------------- 
                                    2016       2015       2016       2015   
                                 ---------  ---------  ---------  --------- 
Cash flows from operating                                                   
 activities                                                                 
Net (loss) income                $ (55,808) $   9,457  $ (53,180) $  13,868 
Adjustments to reconcile net                                                
 income to net cash provided by                                             
 operating activities:                                                      
  Allowance for accounts                                                    
   receivable                          249        156        320        182 
  Depreciation                       6,658      7,078     13,335     14,144 
  Amortization of intangible                                                
   assets                            1,232      1,442      2,545      2,931 
  Amortization of deferred                                                  
   financing costs                     115        161        233        322 
  Goodwill impairment               73,920         --     73,920         -- 
  Stock-based compensation             651        921      1,423      2,004 
  Deferred income taxes            (10,066)     3,847     (8,317)     6,023 
  Deferred tax valuation                                                    
   allowance                           (87)    (3,257)       (15)    (4,791)
  Loss on early extinguishment                                              
   of debt                              44         97         90         97 
  Other non-cash items, net           (119)      (110)      (453)      (284)
  Changes in operating assets                                               
   and liabilities:                                                         
    Accounts receivable               (124)    (2,111)    (1,388)    (6,633)
    Inventory                       (1,199)    (1,765)    (2,767)    (2,858)
    Prepaid expenses and other                                              
     assets                         (1,063)      (282)      (666)     1,717 
    Accounts payable and accrued                                            
     expenses                        2,177      1,230     (3,197)    (4,570)
                                 ---------  ---------  ---------  --------- 
Net cash provided by operating                                              
 activities                         16,580     16,864     21,883     22,152 
                                 ---------  ---------  ---------  --------- 
Cash flows from investing                                                   
 activities                                                                 
Capital expenditures                (2,645)    (4,136)    (5,150)    (7,637)
Other                                  481         93        707        248 
                                 ---------  ---------  ---------  --------- 
Net cash used in investing                                                  
 activities                         (2,164)    (4,043)    (4,443)    (7,389)
                                 ---------  ---------  ---------  --------- 
Cash flows from financing                                                   
 activities                                                                 
Proceeds from stock option                                                  
 exercises                              19         16         30        561 
Proceeds from issuance of common                                            
 stock under Employee Stock                                                 
 Purchase Plan                          31         31         70         58 
Share repurchases                   (2,364)      (204)    (5,097)      (204)
Contingent consideration on                                                 
 prior acquisitions                   (302)        --       (367)        -- 
Early extinguishment of long-                                               
 term debt                          (4,600)    (7,250)    (9,000)    (7,250)
Payments on long-term debt                                                  
 agreements and capital leases      (3,220)    (6,713)    (6,341)   (12,780)
Net repayments under revolving                                              
 credit facilities                      --       (760)        --     (1,744)
Payment of deferred financing                                               
 costs                                  --         (1)       (30)       (25)
Payment of hedge premium                --         --         --       (632)
                                 ---------  ---------  ---------  --------- 
Net cash used in financing                                                  
 activities                        (10,436)   (14,881)   (20,735)   (22,016)
                                 ---------  ---------  ---------  --------- 
Effect of foreign currency                                                  
 translation on cash balances         (321)       (65)      (216)        53 
                                 ---------  ---------  ---------  --------- 
Net change in cash and cash                                                 
 equivalents                         3,659     (2,125)    (3,511)    (7,200)
Cash and cash equivalents at                                                
 beginning of period                16,793     17,561     23,963     22,636 
                                 ---------  ---------  ---------  --------- 
Cash and cash equivalents at end                                            
 of period                       $  20,452  $  15,436  $  20,452  $  15,436 
                                 =========  =========  =========  ========= 
Supplemental disclosure of cash                                             
 flow information                                                           
Noncash investing and financing                                             
 activities                                                                 
    Capital lease obligations                                               
     incurred                    $   5,742  $   3,542  $   8,607  $   7,042 
    Contingent liabilities in                                               
     connection with acquisition                                            
     of businesses               $      --  $      --  $      89  $      -- 
    Liabilities in connection                                               
     with deferred financing                                                
     fees                        $      76  $      --  $      76  $      --